Roth conversions, the pro-rata rule, backdoor contributions, and the Form 8606 details that decide what your retirement accounts cost at tax time.
Blow the 60-day window on an IRA or 401(k) rollover and the entire distribution becomes ordinary income, plus 10% if you are under 59½. Rev. Proc. 2016-47 lets you fix it with a letter to your custodian, no IRS filing fee and no ruling to wait for.
Read postLeave your employer during or after the calendar year you turn 55 and IRC §72(t)(2)(A)(v) lets you pull money out of that plan with no 10% early distribution penalty. Roll the balance to an IRA first and the exception is gone permanently.
Read postA Roth conversion is ordinary income, and Social Security counts it when it sets your Medicare Part B and Part D premiums two years later. For 2026 premiums the first joint threshold is $218,000, and crossing it by a dollar costs a married couple $2,296.80.
Read post
For 2026 the QCD limit rises to $111,000 per person. Sent straight from your IRA to a charity, it satisfies your required minimum distribution and never lands in your adjusted gross income, which a normal donation cannot do.
Read postAn RMD cannot be converted to a Roth IRA. In 2026, the required amount must leave the traditional IRA first; only the dollars above it can move to Roth, even in the year the first RMD is due.
Read postContribute to a Roth IRA in a year your income ends up over the limit and a 6% excise tax runs every year the money stays put. Removed or recharacterized by October 15 of the following year, the mistake costs almost nothing.
Read postThe HSA is the only account in the tax code with a triple tax break: deductible going in, tax-free growth, and tax-free withdrawals for medical costs. Fund it, invest it, leave it alone, and after 65 it works like a traditional IRA with a medical superpower.
Read post
A couple finishes paying for a degree and $32,000 is still sitting in the my529 account. SECURE 2.0 lets it move into the graduate's Roth IRA, $7,500 a year with no income limits, if the account passes a 15-year test and two state-tax catches.
Read postA project manager in Orem maxes her 401(k), then spends an April evening hunting her 1040 for the deduction. Where each account actually shows up, the 2026 limits and phase-outs, and what $32,000 of pre-tax savings is worth in Utah.
Read postStarting January 1, 2026, 401(k) catch-up contributions go in as Roth, not pretax, for anyone whose 2025 Social Security wages from that employer passed $150,000. The test has sharp edges, and a few groups walk through it untouched.
Read postThe $24,500 deferral cap gets all the attention, but the ceiling that matters for the mega backdoor Roth is the §415(c) annual additions limit, $72,000 for 2026. The gap between that number and what you and your employer already put in is after-tax space you can convert to Roth, if your plan document has two specific features.
Read postThe 401(k) elective deferral limit is one number per person, not one per employer. Run two jobs that each offer a plan and you can sail past it without either payroll system noticing, and an uncorrected excess deferral is one of the few things the tax code manages to tax twice.
Read postOn paper a Solo 401(k) shelters far more than a SEP-IRA. But once your W-2 jobs have used up your elective deferral, both plans hold exactly the same contribution on your 1099 income, and the real decision comes down to one thing the SEP quietly breaks: the backdoor Roth.
Read postPeter Thiel turned a $1,700 Roth IRA into a $5 billion tax-free account by buying founder shares inside it. The strategy is legal, but the line between a brilliant move and a detonated IRA runs straight through IRC §4975. Here is how it works and where it goes wrong.
Read postHigh earners are told the backdoor Roth is a free move: contribute to a nondeductible IRA, convert it, owe nothing. Then the tax software says most of the conversion is taxable. The reason is the pro-rata rule and the old rollover IRA you forgot about. Here is the 2026 Form 8606 math and the one fix that has to happen before December 31.
Read post
Most people think the inherited IRA 10-year rule just means emptying the account by year ten. After the IRS final regulations, a non-spouse beneficiary of someone who died after their required beginning date must take an annual RMD in years one through nine, and the real cost is the tax bill waiting in year ten. Here is the 2026 math.
Read post
Company stock sitting in a 401(k) can be distributed in kind so the appreciation is taxed at long-term capital gains rates instead of ordinary income, while a full IRA rollover taxes every dollar as income later. The net unrealized appreciation election under IRC §402(e)(4) turns on one lump-sum distribution and one triggering event. Here is the 2026 math.
Read postRoth conversions, the pro-rata rule, and backdoor contributions all turn on moves made before December 31. We model the tax, sequence the rollovers, and file the Form 8606, so the strategy holds up when the return is filed.