Equity Trust News Alert: Congress Proposes to Relax Roth Eligibility Rules
Proposed New Rule Would Allow Every American to Convert to a Roth IRA No Matter What Their Income
May 8, 2006—Cleveland, Ohio—Legislation before Congress plans to allow holders of Traditional IRAs, even high-income taxpayers, to covert their IRA into a Roth IRA, which allows tax-free withdrawals.
Roth IRA benefits include completely tax-free distributions if the account has been established for five years and the account holder has reached 59 ½ years old. To convert to a Roth IRA Americans must currently fall below $100,000 Modified Adjusted Gross Income (MAGI).
According to published reports Congress is planning to suspend the current
$100,000 MAGI income limit for Roth conversions for one or two years. After a tax payment when converting, Roth IRA holders would benefit with considerable tax savings in later years when making withdrawals.
The plan is part of a larger tax bill that could be finalized as early as this week.
We understand there is considerable interest in this proposed change and we promise to keep you informed with further updates as they become available.
About Equity Trust Company
With more than 32 years experience and management of $2 billion in IRA assets, Equity Trust Company is a leading custodial provider of self-directed IRAs and small business retirement plans, allowing clients to increase financial wealth by investing in variety of opportunities from real estate and private placements to stocks and bonds. Clients benefit from our extensive expertise and exceptional service, including: personalized account management team for every client, including their own 800 number; fast and accurate processing (90% of transactions reviewed in 24 hrs); and access to accounts and online bill-pay with the industry’s first online account management tool, eVANTAGE.