Many people were not allowed to convert their IRAs to a Roth IRA due to the income limitations. Due to the Pension Protections Act of 2006 that has changed . Now everyone is eligible to convert their 401ks to IRAs and then to a Roth IRA or from an IRA to a Roth IRA. To build wealth fast this is an excellent start . It is called a Roth IRA conversion. But should you convert?

According to a Fidelity survey of 800 retirement plan holders with household income of $100,000 or more 83% who work with an advisor said they were unaware of the changes to the law and 54% said they didn’t know whether they would be eligible to convert . Many brokers and advisors are looking at this as an opportunity to talk to clients and get them to convert their money to a Roth that is managed by them, but is this a good deal for you?

Let’s look at the Roth IRA Rules first. What is so attractive about the Roth IRA  is that it allows tax free accumulation of earnings and you don’t have to pay tax when you withdraw the money .

The ideal candidate for a Roth conversion is someone who knows that they will be in a higher tax bracket when they stop working. More and more people are finding themselves in this position because they have accumulated so much in 401ks, IRAs, and other deferred compensation plans where all the money withdrawn is taxable and that causes their social security to be taxed. Social Security benefits are currently taxable if your annual income exceeds $25,000 as an individual taxpayer and $32,000 for couples filing jointly .

Only you know your personal situation and can make this decision . What you decide will affect your future especially if the pundits are right and income taxes go up. Your short term pain of paying the tax now could reap huge rewards in the future.-Fern Alix-LaRocca CFP® Wealth Coach

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For many business owners how their Bournemouth Accountants will charge them is a mystery. You’ll appoint an accountant, ask them to prepare your returns and file them and then wait until the dreaded bill arrives. How much will it be? Who knows!

Well, it’s not always quite like that but just how accountants charge for the services is a bit of a mystery to most…

Accountants have traditionally charged by the hour for the work they do.

In accountancy firms where more than one person is required to manage your account the amount you get charged will vary depending on the seniority of the people involved in the firm.

You will now find more practices becoming a little flexible and willing to offer a fixed fee for certain agreed services so that you know exactly what you are paying.

This can be a much easier and safer way of operating for you.

Occasionally, there may be some work that is done on a percentage of the result obtained or on a no win no fee basis such as taking a contentious tax argument before the tax commissioners.

Apart from the amount of time, the fee quoted or charged will take into account.

• Who in the firm is doing the work.
• The level of skill required for the work you require.
• The risk of the work. For example, providing some tax advice with a large amount at stake would carry a greater risk should something go wrong.
• The level of overheads and profit the firm needs to cover. This will typically be greater the larger the firm.

But remember, as with everything in life, cheapest is VERY RARELY the best.

What you want is RESULTS and value for money.

As always worth paying more to a Bournemouth Accountant that can deliver results through the tax savings and peace of mind.

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