Smart Strategies that Give Back
Before 2010, only taxpayers with income below $100,000 were allowed to convert their traditional individual retirement accounts (IRAs) into Roth IRAs—an option that permits tax-free withdrawals during retirement. This year, Roth IRA conversion is available to all taxpayers, regardless of income level. With help from their tax advisors, many high-income individuals will be considering this option for the first time.
With Roth IRA conversion comes important tax consequences. The value of each converted IRA is added to the fund-holder’s adjusted gross income and some may find they have a large tax liability. One way community foundations can help tax advisors is to suggest offsetting high income years with strategic tax deductions, specifically charitable gifts.
The tools below help you determine and customize your Roth conversion outreach. Get the facts, a simple plan for engaging professional advisors and clients, and the tools you’ll need for each step.CMF Members: please note that you must log in to download these documents.
Download tools individually: