As the COVID-19 situation continues to evolve, Greg Lemon CPA, PLLC’s priority remains on doing our part to ensure the health and welfare of our clients, our people and our communities. As you are likely aware, government authorities are asking businesses to do all they can to help limit the spread of COVID-19.
Effective Monday, March 23rd, GLCPA will be practicing CDC mandated guidelines for Social Distancing. Under these guidelines, we will be restricting clients from interacting with professional staff. This practice will serve in the best interest of our clients, staff, and all family members.
GLCPA’s practice of utilizing technology, tools, and processes that support remote work provide our team with the ability to continue to effectively serve clients and continue business operations during this time.
Your preferred method of communication, email, office or cell phone, with the GLCPA staff will not be affected.
In-person meetings will be rescheduled with conference calls or other electronic communication tools. If you need to reschedule a meeting, please contact our office.
Please submit documents to us one of the following ways ordered by preference:
1. Electronically (using secure upload link provided by GLCPA or via encrypted PDF)
2. Mail or Overnight (to your regularly visited GLCPA offices)
3. Drop-Off (at GLCPA Lobby)
Contact our office professional staff to discuss the best option for document submission. Our Columbia and Lawrenceburg addresses and contact phone numbers are available on our website: https://www.lemon-cpa.com
GLCPA will continue to monitor the COVID-19 situation and respond accordingly. We will continue to adapt our processes and keep you informed of changes that may impact you and your business. If you have any questions or concerns in the shadow of the coronavirus pandemic, please do not hesitate to contact me via email at firstname.lastname@example.org or by phone at 931-388-0517.
Thank you for partnering with us as we push forward during this situation. I have utmost confidence in the talents and abilities of our team members and clients to work through these challenges and emerge stronger together.
Gregory A. Lemon
For some people, Roth IRAs can offer income and estate tax benefits that are preferable to those offered by traditional IRAs. However, it’s important to take note of just what the distinctive features of a Roth IRA are before making the choice.
Traditional vs. Roth
The biggest difference between traditional and Roth IRAs is how taxes affect contributions and distributions. Contributions to traditional IRAs generally are made with pretax dollars, reducing your current taxable income and lowering your current tax bill. You pay taxes on the funds when you make withdrawals. As a result, if your current tax bracket is higher than what you expect it will be after you retire, a traditional IRA can be advantageous.
In contrast, contributions to Roth IRAs are made with after-tax funds. You pay taxes on the funds now, and your withdrawals won’t be taxed (provided you meet certain requirements). This can be advantageous if you expect to be in a higher tax bracket in retirement or if tax rates increase.
Roth distributions differ from traditional IRA distributions in yet another way. Withdrawals aren’t counted when calculating the taxable portion of your Social Security benefits.
A Roth IRA may offer a greater opportunity to build up tax-advantaged funds. Your contributions can continue after you reach age 70½ as long as you’re earning income, and the entire balance can remain in the account until your death. In contrast, beginning with the year you reach age 70½, you can’t contribute to a traditional IRA — even if you do have earned income. Further, you must start taking required minimum distributions (RMDs) from a traditional IRA no later than April 1 of the year following the year you reach age 70½.
Avoiding RMDs can be a valuable benefit if you don’t need your IRA funds to live on during retirement. Your Roth IRA can continue to grow tax-free over your lifetime. When your heirs inherit the account, they’ll be required to take distributions — but spread out over their own lifetimes, allowing a continued opportunity for tax-free growth on assets remaining in the account. Further, the distributions they receive from the Roth IRA won’t be subject to income tax.
As you begin planning for retirement (or reviewing your current plans), it’s important to consider all retirement planning vehicles. A Roth IRA may or may not be one of them. Please contact our firm for individualized help in determining whether it’s a beneficial choice.
Sidebar: TCJA eliminated option to recharacterize Roth IRAs
The passage of the Tax Cuts and Jobs Act late last year had a marked impact on Roth IRAs: to wit, taxpayers who wish to convert a pretax traditional IRA into a post-tax Roth IRA can no longer “recharacterize” (that is, reverse) the conversion for 2018 and later years.
The IRS recently clarified in FAQs on its website that, if you converted a traditional IRA into a Roth account in 2017, you can still reverse the conversion as long as it’s done by October 15, 2018. (This deadline applies regardless of whether you extend the deadline for filing your 2017 federal income tax return to October 15.)
Also, recharacterization is still an option for other types of contributions. For example, you can still make a contribution to a Roth IRA and subsequently recharacterize it as a contribution to a traditional IRA (before the applicable deadline).