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Is a backdoor Roth IRA worth it?
Would you rather pay the taxes on your capital gains in your IRA today (converting=pay tax) or pay the higher Biden taxes on the future gains in your IRA later?
Would you rather pay the taxes on your capital gains in your IRA today (converting=pay tax) or pay the higher Biden taxes on the future gains in your IRA later?
My point was that it might be better to pay the tax on your IRA conversion before it’s huge
Step 1: Move to Puerto Rico. Take only what you will need for more than a year.
Puerto Rico hopes to lure American mainlanders with an income tax of only 4%. Legally avoiding the 37% federal rate and the 13.3% California (or other state) rate sounds pretty good. What’s more, there is no tax on dividends, and no capital gain tax in Puerto Rico.
Yahoo comments on this person's retirement situation is priceless:
https://finance.yahoo.com/m/6e9999fa-4a89-348a-92aa-763a230464bb/i%E2%80%99m-63-years-old-recently.html
Didn't know about this:Puerto Rico hopes to lure American mainlanders with an income tax of only 4%. Legally avoiding the 37% federal rate and the 13.3% California (or other state) rate sounds pretty good. What’s more, there is no tax on dividends, and no capital gain tax in Puerto Rico.
But it seems I'd have to live there for 10 years first to get that tax rate on my appreciated 401k.
https://www.irs.gov/individuals/net-investment-income-tax
Looks like it won't apply to me anymore, because my investment income won't exceed this:
"Married filing jointly — $250,000"
And my 401(k) distributions won't be counted anyway:
"Distribution from IRAs, 401 (k)s and other qualified retirement plans also don't count as investment income."
https://www.retirementwatch.com/everything-you-need-to-know-about-the-net-investment-income-tax-niit
They seem to have snuck this in without my noticing: