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Tax Guy: How the new tax law creates a ‘perfect storm’ for Roth IRA conversions

For years I’ve lectured about the wonderfulness of Roth IRAs. While the new Tax Cuts and Jobs Act (TCJA) includes one negative change for Roth IRAs, they are still pretty wonderful. Here’s what you need to know about Roth IRAs and especially Roth IRA conversions in the post-TCJA world.

Roth IRAs have two big tax advantages

The two most-important Roth IRA tax advantages are:

Tax-Free withdrawals

Unlike traditional IRA withdrawals, qualified Roth IRA withdrawals are federal-income-tax-free and usually state-income-tax-free too. What is a qualified withdrawal? It’s one that is taken after you, as the Roth account owner, have met both of the following requirements:

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