RMR Wealth Management, LLC

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Dear John,

As we approach the end of the year and the possibility of a stalemate in our government and of taxes increasing, I urge you to sit down during your year-end review and think about the possibility of ROTH IRA conversion. 

In January 2010, the $100,000 limit on ROTH IRA conversions disappeared!  That means anyone, regardless of income can execute a ROTH IRA conversion.  Taxes will continue to increase over time as our government continues to spend more than it generate in revenue.  The Roth IRA conversion can be a great tool to minimize taxes by accumulating enough to provide tax free income. 
The 2012 IRS limits for making a Roth IRA contribution are as follows:
• $183,000 if you're married filing a joint tax return.
• $10,000 if you're married filing a separate tax return and lived with your spouse for any part of the tax year.
• $125,000 if you're single, head of household, or married filing separately and did not live with your spouse for any part of the tax year.
The 2012 Roth IRA conversion rules open the door for anyone to make new contributions to a Roth IRA, regardless of income!  If you're ineligible to make a Roth IRA contribution because you earn too much, the 2012 Roth IRA conversion rules provide you with a golden opportunity. 
Here's how...
While IRS income limits also restrict your ability to make Traditional IRA contributions, those limits only apply to deductible contributions, NOT non-deductible (after-tax) contributions.
So if you're ineligible to make contributions to a Roth IRA, make non-deductible contributions to a Traditional IRA instead. Since the $100,000 income limit on making a Roth IRA conversion disappeared in January 2010, you're free to convert your Traditional IRA to a Roth IRA.
By having tax free income in retirement it will help to offset your other assets.  For example if you need to generate a net of $100,000 that means you will need to pull in approximately $200,000 of taxable (gross) income in order to get to your goal.  If you can produce $50,000 of tax-free income that means you will only need to produce $75,000 of gross income.  So ultimately your other assets will last longer and you will qualify for a lower tax bracket. 
Please contact John J. Fiorito at 212-785-4377 x224 to set up a beginning of the year review. 

I wish you and your family a very Happy Holiday Season and a prosperous New Year!!!



John J. Fiorito
Financial Advisor
“Retire Comfortably and Remain Comfortably Retired”

Securities offered through Dinosaur Securities, LLC Member FINRA, SIPC, NFA.

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.  RMR Wealth Management, LLC does not provide legal, tax, or estate-planning advice. For questions about a specific situation, please consult a qualified adviser.   

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