Consider a Roth conversion for 2020

2020 has created a sense of urgency about lots of things, including people’s health, finances, education … practically everything. However, it may also have created a good time for people to rethink their tax planning, and it may have created an opportunity for you to do a Roth conversion.

Why now? A few reasons:

1. Federal legislation has waived required minimum distributions this year. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, waived required minimum distributions (RMD) that retirees would normally be required to take from their retirement accounts. Since RMDs are taxed as ordinary income, not taking an RMD this year would mean less income and potentially lower tax brackets.