Converting to a Roth IRA

As I previously blogged, taxpayers can now convert a 401(k) or IRA to a Roth IRA and give their grandchildren up to $5 million without incurring the generation-skipping tax. However, this tax break may close before 2013 if Congress does not act soon.

It is unlikely that Congress will make changes that retroactively affect taxpayers who took advantage of this estate planning deal, and taxpayers have until October 15 of next year to undo the conversion. IRA expert Ed Slotts advises taxpayers to make the converion as soon as possible to allow their money to grow tax-free.

See Temma Ehrenfeld, Clients Need to Act Fast to Benefit From Congress’ Sweet Estate Planning Deal, Financial Planning, Jun. 28, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.