Roth Conversion
Explore Roth conversion strategies for estate planning. Learn how converting traditional IRAs to Roth IRAs affects taxes, inheritance, and beneficiaries.
Do I have to pay taxes immediately when I do a Roth conversion?
Yes, you must pay income taxes on the converted amount in the year you complete the conversion. The converted funds are added to your taxable income for that tax year. However, once converted, the money grows tax-free in the Roth IRA, and your beneficiaries can inherit it without owing income taxes on withdrawals. This upfront tax payment can significantly reduce the tax burden on your estate and heirs.
