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Ed Slott welcomes you to The Slott Report, your source for IRA, retirement and tax planning information.

What Makes Ed Slott's Elite IRA Advisor Group Workshop Different? Follow LIVE From Orlando

Ed Slott's Elite and Master Elite IRA Advisor Groups are convening this week at the Rosen Centre in Orlando, Florida for our semi-annual workshop.

ed slott's elite IRA financial advisor group Are you a financial advisor interested in what makes Ed Slott's Elite IRA Advisor Group different from other training groups, or a consumer intrigued by what being an "Elite Advisor" means for you as a client of an educated advisor? You can follow us all week on Twitter at @theslottreport and #EliteAdvisorWorkshop for the latest pictures, technical tidbits, videos, testimonials and more from Orlando. 

Also this is mission control, our live blog that will give you a "feel" of what an Elite IRA Advisor experience is all about, the caliber of advisors who train with us and what benefits these advisors receive as members at these meetings.

If you want more information on Ed Slott's Elite IRA Advisor Group, you can click here for benefits, testimonials, schedules and pricing. If you are a consumer searching for an Ed Slott-trained advisor in your area, go here, enter your address and let our Google Maps feature direct you to a list of educated advisors in your area.

Tuesday, April 22, 2014

As mentioned above, we are stationed at the Rosen Centre in Orlando, Florida for this week's workshop. A lot of time, effort and planning goes into site selection, and the Rosen Centre is the perfect venue for our financial advisors with a large meeting and sponsor space and numerous dining and entertainment options in the hotel and the surrounding Orlando area.

ed slott workshop rosen centre
We expect perfect weather all week - sunny skies, 80+ degree days and an overall environment conducive to learning.

Our new members are welcomed into Ed Slott's Elite IRA Advisor Group at a welcome reception tomorrow evening. Each advisor is afforded the opportunity to take a professional photo with Ed that is provided to them at the event and network with other new members, Ed Slott and his technical and support team over cocktails and hors d'oeuvres.

One of the benefits for our new members is a signed welcome letter that many advisors frame and hang in their office to brand themselves as an Elite advisor, showcase their close association with Ed Slott and use as a conversation piece with current and prospective clients.

ed slott elite group welcome letter
New members also receive some other branded materials to connect their membership into their overall practice. We will provide some images of those items during tomorrow evening's welcome reception.

Make sure you check back often as we provide the Ed Slott educational experience live from our spring workshop at the Rosen Centre in Orlando.

Wednesday, April 23, 2014

Wednesday was set-up today at the Rosen Centre, as the technical A/V team from Primitive World Productions set up the ballroom as headquarters for this week's meeting. It is also the day our IRA Technical team came together to record several informational videos as a social outreach to advisors and consumers. This workshop's videos include topics ranging from 60-day IRA rollovers to net unrealized appreciation (NUA) and why it's one of the biggest tax breaks in the tax code.

You can watch the videos below. You can also find them and over 100 other informative IRA, tax and retirement planning videos at our YouTube page, IRAtv. 

NUA - One of the BIGGEST Breaks in the Tax Code

60-Day IRA Rollover Roundtable - Once Per Year in 2015!

Roth Conversion Roundtable - How to Approach the Conversation

The 60-Day IRA Rollover Cheat Sheet - What Counts and What Doesn't

IRS has announced that they are going to go along with the Tax Court decision in the Bobrow case, but they won’t do so until at least January 1, 2015. What's this mean? Going forward, you will only be able to do one 60-day IRA-to-IRA rollover per year. No longer will you be able to do one 60-day rollover per IRA account within the same time frame.

60-day IRA rolloverA 60-day rollover is one where you receive a distribution from your IRA account made payable to yourself. You can cash the check and do anything you want with the money while it is outside of your IRA. You have 60 days from the date you receive the distribution to redeposit the IRA funds into the same or another IRA. If you do so, the distribution and subsequent rollover are a non-taxable event (reportable, but non-taxable).

The following 60-day rollovers DO count in the once-per-year rollover rule.

• Rollovers from one IRA to another IRA – this includes SEP and SIMPLE IRAs
• Rollovers from one Roth IRA to another Roth IRA

The once-per-year rollover rule applies separately to IRAs and Roth IRAs. Thus you can do one IRA-to-IRA 60-day rollover and one Roth-to-Roth 60-day rollover in the same year. The year is a full 12 months, not a calendar year.

The following 60-day rollovers do NOT count in the once-per-year rollover rule.

• Rollovers from IRAs to Roth IRAs, also known as Roth conversions
• Rollovers from IRAs to non-IRA employer plans like 401(k)s and 403(b)s
• Rollovers from non-IRA employer plans to IRAs or Roth IRAs

Once the new rules kick in, you’ll still be able to do as many transfers as you want during the year. In a transfer, IRA assets go directly from the old custodian to the new custodian. You don’t have access to the funds while they are out of your IRA.

- By Beverly DeVeny and Jared Trexler

Slott Report Mailbag: The Tricky Balance of Retirement Planning Funds on the Move

This week's Slott Report Mailbag includes questions about retirement planning funds on the move, namely withdrawing funds and dealing with its tax consequences. As always, we stress the importance of working with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Find one in your area at this link.



I have been contributing to a non-deductible IRA for several years. Originally, my intention was to convert them to Roth. But since I have other Rollover IRAs (from previous 401(k)s, as I understand, if I do the conversion, I will have to pool all these IRAs together for that purpose, which will trigger a large tax bill, because the balance on the Rollover IRA is 3 times the amount of the non-deductible IRA. What should I do?
ed slott IRA questions
Send questions to mailbag@irahelp.com

Also, a related question: when I retire in the future, and start withdraw money from my IRA, do I also need to pool these IRAs together and proportionally pay tax on the part that's taxable? Is there a way to pull out only the principle in the non-deductible IRA without paying any taxes?


Under the pro-rata tax rule, you must add together, or “pool”, all of your non-Roth IRAs. So, when you take any IRA distribution, it will be mostly taxable. But there is one exception to the pro-rata rule. You can roll over all of your pre-tax IRA funds to a company retirement plan, if the company plan allows this, and leave the nondeductible portion in the IRA. Then the remaining IRA funds will all be tax-free, which could be converted to a Roth IRA at no cost.


I am 55 years old. My company was sold to another company. Can I withdraw my 401(k) without penalty? I do not want to roll over my 401(k). Thank you for your assistance.


Whether you can withdraw your 401(k) plan will depend on whether or not that plan is terminated. Most times, the plan gets incorporated into the plan of the new company. If you do not meet the plan requirements for taking a distribution, you will not be able to move your funds out of the plan. Generally, if you are age 55 and no longer working for that employer, then the 10% penalty won’t apply to any distribution you are allowed to take.

- By Joe Cicchinelli and Jared Trexler

3 Ways to Make Filing Next Year's Tax Return Less Taxing

April 16th is here. The blossoms are budding on the trees, the birds are beginning to chirp and, of course, CPAs and tax preparers everywhere are coming out of a 2 ½ month hibernation. Tax season is officially over. With that in mind, taxes may be the last thing you want to talk about right now, but with the sting of this year’s tax season still fresh, now’s the time to start thinking about a few easy steps to help make next year’s tax season a little less... well… taxing! Here are three such steps you might want to consider. 

1. Plan Ahead for Next Year and Beyond                                                                                     
tax planning and preparationIf you weren’t happy with your 2013 tax bill, the best way to make sure you don’t feel the same way again next year is by planning ahead. Here’s the rub in a nut shell, tax planning and tax preparation are not the same thing. Tax preparation tallies up your income, deductions, exemptions, credits, etc. and calculates the amount of tax you owe. That’s not to say it’s not valuable, but theoretically it should not change your tax liability, it should just report your taxes accurately and properly. Tax planning, on the other hand, can help you change your tax liability, but generally only prospectively, that is to say, in the future. Common tax planning strategies include tax loss harvesting, investing in assets that have tax-favorable characteristics, retirement plan contributions and Roth conversions (caution – Roth conversions will generally increase your tax bill for next year, but could reduce it for the long-term).

2. Make Estimated Tax Payments
The shock of a large tax bill is often hard to swallow. One way to soften this blow is by making estimated tax payments throughout the year or by increasing withholdings from your salary, pension or other eligible sources. In addition to being more palatable than one giant lump-sum tax payment in April, doing so may actually help you lower your overall tax bill by avoiding estimated tax penalties. While this may lead to you overpaying your taxes, it can be worth it. Now there are many articles that discuss why overpaying your taxes throughout the year and getting a refund is bad, and they generally have a very valid dollars and cents argument. There’s no financial benefit to overpaying your taxes throughout the year because Uncle Sam does not give you any interest on those amounts. However, not everything is always a dollars and cents issue. For many people, paying in smaller amounts each month is simply easier to stomach than a giant check in April made out to their least favorite Uncle. If the end result is an overpayment, a refund check isn’t the worst thing in the world, even if it was an interest-free loan to the government.

3. Keep Better Records
Time and time again, those with better records pay less tax. It’s best to start your new and improved system of tax organization at the beginning of the year for obvious reasons, but without any real motivation, sometimes that just isn’t a reality. Now that you’ve just filed your taxes though, that motivation is probably at an all-time high for the year. Think about it, wouldn’t filing those taxes have been easier if you had better records and were more organized. If someone else prepares your taxes, organization can save you not just time, but money. If you have your ducks in a row, that means less time your CPA or tax preparer needs to spend digging for info, which should mean a lower rate to prepare your return. So at the very least here’s what to do for the rest of this year… every time you get anything tax-related, throw it in a folder. Even if that folder, itself, is not organized, at least all your info will be in one place. That’s a good starting point and one that is sure to save you at least a few headaches.

- By Jeffrey Levine and Jared Trexler

Using Your Income Tax Refund as an IRA Contribution

If you're lucky enough to be getting an income tax refund from IRS for 2013, you might be wondering what you can do with that money. Certainly you can use it to pay some bills, or treat yourself to something you've wanted to buy for a while.

tax refund IRA contributionBut if you're thinking about using that refund to help save for retirement, you're in luck. The IRS allows you to have that refund check directly deposited into an IRA if you follow certain procedures when you file your federal income taxes for 2013.

If you have an extension to file your 2013 taxes until October 15, 2014, when you do file your return, you should consider having the IRS directly deposit your tax refund as an IRA contribution for 2014. Note: You won’t be able to have the refund count for 2013 because the deadline for making a 2013 IRA contribution was April 15, 2014. But why not consider using it as a 2014 IRA contribution?

To have the IRS directly deposit your tax refund as a 2014 IRA contribution, there are several rules you’ll need to follow. First, make sure the IRA custodian will accept it and notify them in advance.

You’ll need to file IRS Form 8888, Allocation of Refund (Including Savings Bond Purchases), if your refund will be directly deposited to two or three different accounts. However, if you’re depositing your refund to only one account (i.e., your IRA), simply note the direct deposit information on the appropriate line of your federal tax return.

Lastly, know that you must meet all the IRA rules for making a 2014 contribution. For example, for a traditional IRA contribution, you must have compensation and be under age 70 ½ for all of 2014. For a Roth IRA contribution, you must have compensation and your income must be below certain levels to be eligible for a Roth IRA contribution (e.g. under $181,000 if you are married and filing jointly for 2014).

 - By Joe Cicchinelli and Jared Trexler

After-Tax IRA Contributions, Distributions, Conversions at Tax Time

How do I tell IRS that my IRA distribution or Roth conversion is not taxable? We get this question fairly frequently at tax time - especially if the client has done a "backdoor" Roth conversion.

The answer is IRS Form 8606.
After-Tax IRA Distribution Tax Planning
You make an after-tax contribution to your IRA or a series of after-tax contributions to the IRA. Now it is time to take the money out or you want to do a Roth conversion of the IRA. How will IRS know that some of the funds are after-tax so you won’t have to pay tax again when they are distributed?

The first thing to realize is that the IRA custodian does NOT keep track of your after-tax contributions – even if you tell them that the funds are after-tax or keep the after-tax funds in a separate IRA. They have no way of knowing what you do on your tax return so they have no way of knowing if you really take a deduction for that IRA contribution. The 1099-R that you receive from the IRA custodian for the distribution is going to say that the taxable amount is not known.

Any time you make an after-tax contribution to an IRA, you need to file IRS Form 8606 with your tax return to tell IRS that you have after-tax funds in your IRA. Without this form, IRS will assume that any funds that are distributed from your IRA account are taxable.

Secondly, you have to tell IRS that you did a Roth conversion, even if the entire amount converted is IRA-after-tax funds. There is a special section on Form 8606 for reporting Roth IRA conversions.

Finally, Form 8606 will tell you how much of your IRA distribution is taxable. This is going to depend on the total amount you have in all your IRA accounts, including SEP and SIMPLE IRAs and the total amount of after-tax dollars in your IRA. You cannot isolate only the after-tax amount and say that is what you took out of your IRA. You have to divide your total account balance into the total of your after-tax amount and come up with a percentage. The percentage is applied to your total distributions for the year to determine what amount is taxable and what amount came out of your after-tax amounts.

Example: Your total IRA balance is $100,000 and your after-tax contributions are $10,000. $10,000/$100,000 = 10%. Ten percent of all your distributions for the year will not be taxable.

- By Beverly DeVeny and Jared Trexler

Slott Report Mailbag: Can I Convert SEP IRA Funds to a Roth IRA?

This week's Slott Report Mailbag focuses on a SEP IRA conversion to a Roth IRA. It's an interesting question (one we don't get often), so we decided to put a spotlight on the issue in this week's mailbag. As always, we stress the importance of working with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Find one in your area at this link.


ed slott IRA questions
Send questions to mailbag@irahelp.com
I want to contribute to SEP IRA through an LLC that I own. Once in the SEP IRA account, I want to convert it to Roth IRA. Is that workable? Should I be careful of any issue?

IRA funds, including SEP IRA funds, can be converted to a Roth IRA. As long as you are not age 70 ½ or older this year, all of your SEP IRA funds can be converted to a Roth IRA. If you are going to make future contributions to the SEP IRA you should leave enough money in the account to keep it open. There are many issues involved in whether or not you should convert to a Roth IRA. The good news is, if you later decide the conversion was not the right move for you, you can unconvert (recharacterize) some or all of your conversion by October 15th of the year after you did the conversion. Please see our website to locate an Ed Slott trained Elite IRA advisor to discuss your situation.

- By Joe Cicchinelli and Jared Trexler