Saturday, July 18, 2009

Could the federal government tax Roth IRA earnings after all?

Ron Lieber at thinks so, and warns against rushing in to convert one's IRAs to Roth IRAs come January. In addition to applying an income tax or perhaps a capital gains tax on Roth IRA distributions, he raised the possibility of an "excess accumulations" tax.

This would represent a remarkable break of faith with the taxpayer, even bigger than when Social Security benefits became partially taxable.

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