Why would you want to convert? A major attraction of Roth IRAs is that distributions are tax-free, provided you meet the age and holding period rules. And there are no required annual distributions once you reach age 70½. In contrast, you’ll generally pay tax at ordinary income rates on distributions from a traditional IRA.

With a Roth IRA, you can enjoy tax-free growth and distributions whenever you want throughout your retirement years, or you can leave the Roth for heirs to receive tax-free distributions.

When a taxpayer converts a traditional deductible IRA to a Roth IRA, the amount converted is added to taxable income and is taxed at ordinary income rates. There is a special incentive to do a Roth conversion next year.

If you convert in 2010, you can report half of the income on your 2011 tax return and the remaining half on your 2012 tax return. If you choose, you can report all of the conversion income on your 2010 return.

It’s important to weigh the pros and cons of a Roth.

Put mid-year tax planning in your summer agenda

IRS defines new work credit

Social Security and Medicare to go broke sooner than expected.

Read details:  http://www.planningtips.com/Planning_Tips.asp?Co_ID=98512&Tip_ID=6850

Comment below for conversation about these topics!

I often see two business owners in the same place financially.  One is struggling, or what I call  “starving” and one is what I call “hungry”.  Can you see the difference?  It’s an attitude, not the state of their financial being. 

Struggling or starving business owners are working  hard IN the job of their business, with their head down, running into things (challenges).  They just keep on doing what they know to do, getting the same results, taking what comes to them.  There’s always something in their way and eventually they give in and give up or close because they starve.

Hungry business owners, on the other hand, are working IN their business too, doing their job, but they walk around with their head up and don’t run into things because they can see where they are going.  They know things aren’t going well and they don’t yet know how to fix it.   But they are looking for help, proactively looking for new things to try instead of taking what comes to them.  They know that they will find it if they keep looking and they won’t give up until they find it.  They are hungry but not starving because they get bits of food (or success) along the way to keep them going.  They won’t stay hungry – they’re just passing through that stage.

Do you see the difference?  What kind of business owner are you?  I am looking for “hungry” business owners to tell your story here.  Our site is about giving you tools to feed yourself.  Don’t stay hungry!!   Come back and stick around!

Debra

Tax Tip of the Week – CLICK BELOW

http://www.planningtips.com/Planning_Tips.asp?Co_ID=98512&Tip_ID=6801

Debra Schill

Office of: Debra Schilll, CPA

www.DebraSchillCPA.com

Planning some home improvement work this summer? Make energy efficiency changes and you might be able to cut your 2009 tax bill at the same time.

The 2009 tax law signed in February expanded energy tax credits in order to encourage homeowners to make improvements that will make their homes more energy- efficient and save money over the long run.

Qualifying improvements – such as adding insulation, energy-efficient exterior windows, and energy-efficient heating and air conditioning systems – could cut your taxes. Previously the credit for energy improvements was 10% of the cost, with a $500 lifetime limit. The new law increases the credit to 30%, with a $1,500 limit.

The new law also eliminates the cap on the 30% tax credit for alternative energy equipment, such as solar water heaters and geothermal heat pumps installed in homes.

For details and guidance in capitalizing on the enhanced energy credits for your home improvement projects, give us a call. We’re here to help you benefit from every available tax break.

10 Strategies that ALWAYS work!  www.AfterBusinessPlanning.com

Here’s a new business tip every month:

http://www.planningtips.com/Planning_Tips.asp?Co_ID=98512&Tip_ID=6802

It’s up to YOU to get started!  Let me know how I can help you.