Planning for Retirement

Donna Flatau, CPA, Supevisor

I'm sure you have seen the headlines stating that 2010 is the perfect time to convert your Individual Retirement Accounts (IRA) to a Roth IRA. So you start wondering why now? What changed? Well here is the story.

Beginning in 2010, the $100,000 income limitation for converting traditional IRA's to Roth IRA's has been lifted. Conversions that occur in 2010 will be able to have half of the converted amount taxed in 2011, and the other half in 2012. With the recent downturn in the economy, many small business owners who are experiencing losses are electing to take advantage of the Roth conversion during years of low income, and paying little or no tax on the conversion. But, this strategy requires careful planning with your tax advisor, so don't forget to call us.

Okay, so you don't have an IRA that needs to be converted because you are a small business owner and have not been ready to implement a formal retirement plan. Don't let that stop you from planning for your own retirement. Setting up an Individual Retirement Account (IRA) may be just the thing to get you started.

Contact us for further information regarding Roth IRA's, Self Employed Pension Plans, and other retirement plans for small business owners.