[Boomer]

Originally Posted by retiredguy123

You can do a Roth conversion over time, pay the tax, and continue to earn tax free income. And, your heirs will owe no taxes when they inherit the Roth.

This is really good advice, not just for tax savings to heirs, but down-the-road tax savings for yourself should you decide you want or need to tap into that Roth.

I did a few conversions, years ago, but — I did not do it as much as I should have.

A question for retiredguy123:

Am I correct that when doing a conversion to Roth after reaching RMD age, the conversion must be done AFTER the RMD is met?

(I think November is a good time to project income to see what can be done to save taxes and to dodge IRMAA, if getting close — perhaps by using QCDs if charitably inclined. The recent market will lower the RMD for those who are seeing their holdings take a hit, so maybe it might be worth looking at adding on a conversion to Roth.)

I was still relatively young when I was doing conversions to Roth and my accountant asked me why I wanted to pay my kid’s taxes. But that was not what I was thinking about. I was thinking about our own future use of IRA money that had already had the taxes paid.

Boomer

[ElDiabloJoe]

Originally Posted by retiredguy123

You can do a Roth conversion over time, pay the tax, and continue to earn tax free income. And, your heirs will owe no taxes when they inherit the Roth.

^ I got this advice a few years ago. I'm still in the years long process to do this (I convert max I can per year to prevent bumping up to a new bracket). I also withdraw/convert enough to pay for the conversion taxes as I go. I still have a few years before I can withdraw without penalty, so now I'm back to contributing more :-). I use a rule of thumb (which isn't really working in the current economic circumstances) that every 100K it goes up, I pull 10K and go on a grand vacation with Mrs. Eldiablojoe.

[tuccillo]

Am I the only one who finds that hiring more agents for compliance of a very complicated tax code, instead of simplifying the tax code, to be a bit crazy?

Originally Posted by Haggar

Where does this crap about 85,000 agents come from? The IRS is grossly understaffed - try getting through to them. CPA's haven't been able to get through to the CPA hotline for months. The IRS is up to six months behind processing mail. Their software is from the 1980's.

Yes- some of the money is going to examination agents - but most of it is going to get the IRS running again.

And what's wrong with agents? They pay for themselves three times over.

[retiredguy123]

Originally Posted by Boomer

This is really good advice, not just for tax savings to heirs, but down-the-road tax savings for yourself should you decide you want or need to tap into that Roth.

I did a few conversions, years ago, but — I did not do it as much as I should have.

A question for retiredguy123:

Am I correct that when doing a conversion to Roth after reaching RMD age, the conversion must be done AFTER the RMD is met?

(I think November is a good time to project income to see what can be done to save taxes and to dodge IRMAA, if getting close — perhaps by using QCDs if charitably inclined. The recent market will lower the RMD for those who are seeing their holdings take a hit, so maybe it might be worth looking at adding on a conversion to Roth.)

I was still relatively young when I was doing conversions to Roth and my accountant asked me why I wanted to pay my kid’s taxes. But that was not what I was thinking about. I was thinking about our own future use of IRA money that had already had the taxes paid.

Boomer

It is correct that you cannot convert the RMD part of your IRA distribution to a Roth.

Note that, for people who turned 72 this year, 2022, you must take your first RMD by April 1, 2023. But, there is still a good chance that Congress will pass the Secure Act 2.0 by the end of 2022. That law will most likely change the age to start the RMDs from 72 to 73. So, I would wait at least until the end of December to take your RMD to see if the law changes. But, if you wait until 2023 to take the first RMD, you will need to take two RMDs in 2023.

[CoachKandSportsguy]

Originally Posted by retiredguy123

You don't need to create a false charity. A legal one will do just fine. I read a lot of IRS Form 990's filed by charities. One that stands out was a charity created to sound like the well known "Make a Wish" charity. It is a common tactic to make the charity name sound like a well known charity. They collected almost $500K in one year. The CEO collected a salary of $200K, his wife, the vice President, collected $150K and his mother-in-law collected $100K as the treasurer. ...If a charity has a legitimate mission statement, and follows the IRS reporting rules, they have no obligation to be efficient or to spend the money wisely. Wasting taxpayer money in a charity is not illegal.

Fact check: True~! My daughter was working for Vista in Minneapolis, and GIVEMN asked the Vista workers to promote donations. I read their public documents, and the mission and cost structure was similar to what the quote above stated. Their mission was donating to educational institutions and situations, after large salaries were distributed for managing the charity. .

most common way to receive a large salary using OPM, (other people's money)

finance guy
remember, do your own research by reading, the time proven method for your personal BIOS upgrade

[CoachKandSportsguy]

This article is a tax avoidance article, not the same as a wealth maximization article. Wealth maximization is the only way to stay ahead of ever changing tax law changes. . .