By Andy Ives, CFP®, AIF®
IRA Analyst
QUESTION:
With the signing of the “One Big Beautiful Bill Act” (OBBBA) legislation and the current tax rates being made permanent, have your thoughts regarding Roth conversions changed?
Jim
ANSWER:
Jim,
We have always been, and will continue to be, big proponents of Roth conversions. OBBBA does not contain any changes directly related to the IRA or retirement plan rules, nor is there anything in the law specifically about Roth accounts. However, the law does contain several new tax deduction opportunities that could allow for larger Roth conversions. As you mentioned, the current tax rates are extended “permanently” (until Congress decides to change them). This expands the opportunity to do Roth IRA conversions at low brackets for future years.
QUESTION:
I took a distribution from my Roth IRA. Can I roll the funds back into the same Roth IRA, or must I move the funds to a different Roth IRA?
ANSWER:
If you have not done any 60-day IRA-to-IRA or Roth IRA-to-Roth IRA rollovers in the previous 12 months, you can roll the assets back to the same Roth IRA account. There is no rule that says the assets must go to a different account. You will still receive a Form 1099-R showing the distribution and a Form 5498 showing the rollover.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/slottreport/one-big-beautiful-bill-act-and-ira-rollovers-todays-slott-report-mailbag/