Roth IRAs allow the owner to benefit from TAX FREE growth and TAX FREE withdrawals but are funded with after tax funds. How can you reduce the tax that you have to pay when you convert a multi million dollar IRA or 401(k) into a Tax Free Roth IRA?
See the following real life client example of an individual who converted a $2.1 million IRA account and only paid $161k in taxes.
2023 FORM 1040
Note that the client had TOTAL INCOME of $2.4 million (line 9) yet their TAXABLE INCOME (line 15) was only $629k resulting in a TOTAL TAX (line 24) of $161k. This was $800k less than the typical taxes that would normally be due on a transaction of this size. Over time, by doing a lump sum Roth IRA conversion and utilizing the SUPERCHARGED ROTH IRA conversion tools this client was able to reduce their lifetime tax liability by over $9 million.
Saving $9 million in taxes over their retirement life and investing the difference was able to increase their net worth by an additional $24 million.
These tax savings are accomplished by utilizing the Supercharged ROTH IRA conversion strategies that we have been teaching for years and are heavily driven by some of the unique tax reduction laws that are included in the 2017 JOBS ACT and the 2022 Inflation Reduction Act. Schedule a time to speak with an Optimal Tax advisor today to learn more.
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