The obvious benefit of a Roth IRA is that ALL future distributions from the account will be tax free! However, there are many issues to consider when deciding if and when it makes sense to convert from a traditional IRA. Chortek can explain the pros and cons from a tax and estate planning perspective based on your unique situation.

Starting in 2010, anybody can convert all or part of their traditional IRA to a Roth. This conversion is taxable, but as an enhancement, the IRS will allow the income from the conversion to be deferred and reported one-half in 2011 and one-half in 2012.

Pending a legislative change, Wisconsin has not yet adopted these new rules. As a result, Wisconsin tax will be due in the year of the conversion, and penalties will be assessed on current and future Wisconsin returns. Check Chortek’s website for a news release if Wisconsin changes their position.