"The stock market has been full of crazy swings this year. Your retirement accounts were buoyed by the 1.2% gain in the Dow Jones Industrial Average on January 8. Then you cringed as account values bounced around in March with a 333 point drop. You nearly fainted as the Dow plunged again this summer – 500-plus points on August 21! While the close of the year has offered some recovery, you haven’t yet recouped the value you started with at the first of the year."
The Internal Revenue Service (“IRS”) recently released guidance relating to a new requirement for individuals to report their interests in “specified foreign financial assets.”
The Internal Revenue Service announced today the third in a series of special voluntary disclosure programs designed to provide taxpayers who have undisclosed income from offshore accounts and assets a means to become current with their taxes. This new initiative is similar to the 2011 Offshore Voluntary Disclosure Initiative (OVDI) and the 2009 Offshore Voluntary Disclosure Program (OVDP), both of which have ended.
With Congress taking no action in 2009 to alter the repeal of the estate and generation skipping transfer taxes for 2010, we are, at least temporarily, in the favorable position of having those taxes inapplicable to 2010. Unfortunately, it is unclear whether Congress will pass retroactive legislation, whether such retroactive legislation would be constitutional, or even exactly what it means that these taxes are “inapplicable” if Congress takes no action.
Beginning in 2010, there are no income restrictions to convert a Traditional IRA and/or an employer-sponsored retirement plan, such as a 401(k), to a Roth IRA. As a result, many individuals who weren’t previously eligible to convert their Traditional IRA or 401(k) to a Roth may now be able to benefit from the tax advantages of a Roth IRA. A Roth IRA has the potential to grow tax deferred and produce tax-free income in retirement for the retiree or his heirs.