Down market could be right time to convert IRA to Roth IRA
The recent market downturn has reduced the value of many IRA accounts, presenting a potential opportunity to convert IRAs into Roth IRAs. While converting, taxes will be owed on the converted IRA value, but with current lower asset values, the tax liability is correspondingly reduced.
Moreover, given the economic conditions, businesses may experience decreased income or even losses, impacting owners’ personal tax returns. Lower income levels could make a Roth conversion more appealing, potentially allowing losses to offset taxable income from the conversion or benefiting from lower tax brackets this year.
You can still contribute to retirement accounts for 2019 until April 15, 2020. Discuss with your ShindelRocktax professional whether this volatile market environment and your individual income situation may merit an IRA conversion to a Roth IRA at this point or sometime this year.