[ale] [OFF TOPIC] Tax time

[Pete Hardie]

If you convert a traditional IRA to a Roth, you do have to pay for it.
There was a short time around the creation of the Roth IRA where you could
switch without a penalty

On Thu, Mar 17, 2016 at 5:11 PM, Lightner, Jeff <JLightner at dsservices.com>
wrote:

> Actually this isn't new in the world.   They have always reduced your SS
> benefit based on all other earnings.
>
> The old rule used be along the lines they'd take away $1  from SS for
> every $2 you earned.
>
> I'm not a CPA nor a tax expert but  it seems to me your "earnings" in a
> ROTH are the interest not the money you deposited because as you noted you
> were already taxed on that.
>
> This link says clearly the ROTH money isn't taxable:
>
> http://money.usnews.com/money/retirement/articles/2015/02/09/how-to-reduce-taxes-on-your-social-security-payments
>
> " However, money withdrawn from Roth accounts in retirement, which is
> typically not a taxable event, will not contribute to making your Social
> Security benefit taxable."
>
> It even suggests you could convert 401(k) and other accounts to ROTH to
> avoid this taxation on Social Security benefits.  Presumably you'd have to
> pay taxes at the conversion though since the money in a 401(k) or
> traditional IRA was NOT taxed when it was deposited.
>
>
> -----Original Message-----
> From: ale-bounces at ale.org [mailto:ale-bounces at ale.org] On Behalf Of Sean
> Kilpatrick
> Sent: Thursday, March 17, 2016 12:27 PM
> To: Atlanta Linux Enthusiasts
> Subject: [ale] [OFF TOPIC] Tax time
>
> For those of you who file a joint tax return for state and federal AND
> contribute to a Roth IRA, you might want to talk to a cpa -- soon.
>
> Why,
>
> Because one more time our Congress-critters have lied to us.
> When you retire and try to draw on the Roth IRA you will find that it is,
> indeed, taxable -- at about a 21% rate.
> So how does this shell game work?
>
> Your retirement income usually is made up of two main components: your
> Social Security and Everything Else.  The greater the sum of Everything
> Else, the more of your Social Security income is taxable.  The Roth is part
> of Everything Else.  If you run through the worksheets with and without the
> Roth component of your retirement income you will clearly see that it is
> the Roth income that is driving up your net tax bill.
> Your money is being taxed twice.
>
> You have 32 days.
>
> Sean
>
>
>
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-- 
Pete Hardie
--------
Better Living Through Bitmaps
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