Year-End Tax Considerations
The fate of the Bush tax cuts was unknown at press time, as Congress had just reconvened. A compromise that would temporarily extend all tax cuts, including those for high-income earners, was being discussed. Thus, be sure to look for any legislative changes before making year-end tax planning decisions.
Even with the uncertainty, there are factors that, depending on your financial situation, may need to be considered before year-end. Here are some that might be most pertinent to AAII members.
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Roth IRA Conversions
As stated in the Briefly Noted column in this issue, investors can delay paying taxes on Roth IRA conversions until 2011 and 2012. The requirement is that a traditional IRA must be converted to a Roth IRA by December 31, 2010. Starting January 1, 2011, taxes on a Roth IRA conversion are due the same tax year that the conversion is made. See IRS Publication 590 for more information (all IRS publications are available at www.irs.gov).
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