Reuters article talks additional COVID PSP...
02-09-2021 | 09:54 AM
#21
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Joined: Oct 2015
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02-09-2021 | 10:01 AM
#22
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Joined: Oct 2014
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The key to avoiding tax on the conversions is having a zero balance in any traditional IRA accounts on December 31 of the year you make the conversion. If you do this, you aren’t subject to the pro-rata rule responsible for the taxes in question.
If you put $6k into your t-IRA then make the conversion, there wouldn’t be any taxes on that money since you were using after-tax funds and you (presumably) had not claimed that deduction on your taxes yet.
02-09-2021 | 10:05 AM
#23
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02-09-2021 | 10:30 AM
#24
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Joined: Jan 2007
Posts: 440
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From: 30 West
You can roll funds into a Roth and pay the tax now. If you can afford the hellacious tax bill, you can create a giant pile of money to invest tax-free.
My Roth account is up over 10 percent since Jan 1st this year and went gangbusters last. If I can manage another 12-18 years above the sod, I can put a lot of money in my pocket and none in Uncle Sam's.
My Roth account is up over 10 percent since Jan 1st this year and went gangbusters last. If I can manage another 12-18 years above the sod, I can put a lot of money in my pocket and none in Uncle Sam's.
02-09-2021 | 10:42 AM
#25
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Joined: May 2009
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From: The GF of FUPM
If you're a young buck, you could always consider tossing X amount in each year. Some number that your budget will allow you to pay the tax upon. Invest wisely in the Roth. Make a tax free killing. And if at some point in the future our elected representatives decide to dip into our 401's, if the Roths are not included you will have safeguarded money.
02-09-2021 | 10:52 AM
#26
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From: 30 West
Don't get me wrong I think the Roth is a great tool. I'm a bit further down the trail than you, but I also think one should enjoy much if not most of what has been accumulated before becoming too old to enjoy it.
02-09-2021 | 12:21 PM
#27
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From: The GF of FUPM
Last edited by oldmako; 02-09-2021 at 12:31 PM.
02-09-2021 | 12:34 PM
#28
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Joined: Mar 2015
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Something to think about; from Schwab's website:
If restrictions do come into play at some point, they could require backdoor Roth converters to pay a penalty or they might include a grandfather clause. In the meantime, it’s an option to consider."
The backdoor Roth may not last forever
"Although this strategy has existed since 2010, the IRS has not officially commented or provided formal guidance on whether it violates the step-transaction rule. (When applied, this rule treats what are several different steps as if they were a single transaction for tax purposes.) Experts have mixed opinions on the likelihood of this happening, but the lack of a definitive ruling means there is some risk involved. If the IRS decides that the loophole is a violation, you could owe a 6% excise tax for overfunding your Roth.If restrictions do come into play at some point, they could require backdoor Roth converters to pay a penalty or they might include a grandfather clause. In the meantime, it’s an option to consider."
02-09-2021 | 01:55 PM
#30
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Back to the original topic, another 6 months of support would be huge in getting us through the entire summer of vaccine distribution & growing travel demand, greatly increasing the likelihood that we’ll be at (or least very near) the 70% target by the time we revert to the pandemic LOA.
It it will also create an interesting market for competition- essentially providing an entire summer season with little to no risk of financial loss. Airlines that use this opportunity to make bold steps could potentially put themselves in a very strong position for the post-pandemic market, while those who “hunker down” & prepare for the approaching winter could find themselves left behind.
Lets hope UAL capitalizes on this moment with an aggressive growth strategy rather than getting stuck in a survival mindset.
It it will also create an interesting market for competition- essentially providing an entire summer season with little to no risk of financial loss. Airlines that use this opportunity to make bold steps could potentially put themselves in a very strong position for the post-pandemic market, while those who “hunker down” & prepare for the approaching winter could find themselves left behind.
Lets hope UAL capitalizes on this moment with an aggressive growth strategy rather than getting stuck in a survival mindset.
