Before converting a traditional IRA to a Roth, understand how the pro-rata rule and Dec. 31 balance can affect your tax bill.

Pro rata is a Latin term that translates to "in proportion." Put simply, it is used to describe a proportionate allocation. It's a process in which an allocated asset is distributed in equal portions.

Q. Hi Dan. In your last column you wrote about “… a rather infamous provision dubbed the ‘pro-rata rule.’” One of my IRAs is non-deductible, so I need to know what that is and why it’s infamous. Can ...

Waiting months between a backdoor Roth contribution and conversion lets earnings accumulate, taxed at ordinary income rates and costing top-bracket earners roughly $42,000 over 20 years. The pro-rata ...

A review of the IRS and plan rules that can affect how participants can draw down their pre- and post-tax retirement accounts. The Internal Revenue Service requires certain distributions from ...

The IRS pro-rata rule taxes backdoor Roth conversions based on your entire IRA pool, making a $7,500 conversion roughly 96% taxable if a $200,000 rollover IRA exists alongside it. At the 37% marginal ...

It has been more than a decade since the income limits on IRA conversions were lifted, effectively putting Roth IRA investments within reach of higher-income individuals who had previously been shut ...

As clients amass their retirement dollars over their working years, tax situations are likely to become more complicated over time. That's especially true for clients who are fortunate enough to have ...