Facebook Vice President David Marcus is the face of the company's Libra digital currency, but the original driving force was a 26-year-old female corporate-development...Technologyread more
Amazon's new policy for account suspensions doesn't go far enough to protect sellers from potentially unfair and wrongful suspensions, merchants say.Technologyread more
There is no end in sight to the Boeing 737 Max grounding after two fatal crashes, prompting airlines to rethink their growth plans.Airlinesread more
After a year of flooding, Midwest farmers face a stifling heat wave that's spreading across the U.S.Agricultureread more
A quarter of the S&P 500 companies report earnings next week, and that could buffet the market as investors await the July Fed meeting.Market Insiderread more
Moving lots of data to a public cloud over the internet can take months or years. CNBC got an inside look at how AWS transfers data to the cloud for its clients.Technologyread more
Iran's Revolutionary Guard claims a British tanker it still holds, Stena Impero, failed to follow international maritime rules.World Newsread more
"It troubles me that the most important political office in the world is becoming the face of racism and exclusion," Kaeser said in a Twitter post.Politicsread more
Silver's rally could be losing its shine after the precious metal reached its year-to-date high, futures experts warn.Futures Nowread more
Some 40% of Americans would struggle to come up with even $400 to pay for an emergency expense. Just how are so many Americans so short on cash? Blame debt.Personal Financeread more
Amazon hires Trump-allied lobbyist Jeff Miller as battle for Pentagon contract heats up.Politicsread more
If you earn a lot and want to contribute to a tax-friendly Roth IRA now, it's a two-step process. But it's a process a growing number of high earners are willing to undertake.
Under current rules, you can only contribute directly to a Roth if you have an income of less than $131,000, or $193,000 if you're filing as a married couple. High earners have gotten around the income cap, however, by making nondeductible contributions—up to $6,500 in 2015 for those 50 or older—into a traditional IRA, which doesn't have income limits as long as investors aren't claiming a deduction. They then convert the IRA to a Roth. (Since they've effectively paid tax on the money when they made the contribution, they won't have to pay tax on it again later.)
The number of conversions took off in 2010, after the IRS lifted income restrictions on converting to a Roth IRA. Traditional-to-Roth IRA conversions increased by a whopping 800 percent over the following year, from $6.8 billion in assets in 2009 to $64.8 billion in 2010, according to an IRA analysis. And the number has continued to climb.
Last fall, the Internal Revenue Service also released a notice clarifying that workers who are allowed to make after-tax contributions to their 401(k) plans can also roll that money into a Roth. That means savers could, hypothetically, put more than $50,000 into a Roth IRA each year. (For 2015, the IRS established an individual contribution limit of $53,000, or $59,000 for those 50 and older who are catching up.)
But both options would end under President Barack Obama's proposed 2016 budget plan, as after-tax money held in a traditional IRA or an employer-sponsored retirement plan like a 401(k) would no longer be eligible for conversion to a Roth IRA account.
Chances of adoption: Small. This provision is particularly surprising, given the IRS clarification last fall, said Jeffrey Levine, a CPA and an IRA technical consultant with Ed Slott & Co. "It's like the left hand isn't talking to the right hand," he said, adding that while it seems like an "unfair" provision, there's still a chance it will pass.
What advisors are saying: Better to be safe than sorry. "If you were considering a back-door Roth IRA, do it this year and maximize your contributions because you may not be able to do it next year," said Cathy Curtis, a certified financial planner and founder of the fee-only investment advisory firm Curtis Financial Planning. "Not putting all your eggs in one basket is a good strategy. And a Roth is one more basket to have."
For more information on other provisions that could affect you, click here.