Here is a conversation that we are having with our clients.  I thought it was important to share this information.


I’m sure you knew that in the 2010 the federal law was amended to allow conversions of traditional IRA’s to Roth IRA’s regardless of the income levels of the IRA owner. The current modified adjusted gross income (MAGI) limit is $100,000.  In addition, the law was amended to allow the IRA owner to pay the tax owed on the amount converted over a two year period (2010 and 2011), instead of paying the entire tax in the year of conversion. This is an interesting option for consideration for many of our customers. It makes a lot of sense, especially if you believe that income tax rates are at their lowest right now than they will be over the next decade or so. With all of the bailout money being dished out, Uncle Sam will need to raise revenue – this seems like a good probability.  


But did you know that our friendly Wisconsin legislators have not yet adopted this federal law change at the state level. This means that a person could convert his or her traditional IRA to a Roth IRA tax effectively for federal tax purposes, but at the Wisconsin state level (if the IRA holder’s MAGI is above $100,000) the conversion would either be a taxable event or possibly an ineffective Roth conversion. Either result is not acceptable for our customers.


If the IRA holder’s MAGI is below $100,000 in 2010, an effective Roth conversion can be executed at both the Federal and Wisconsin state levels.


Stay tuned…I’ll be participating on a conference call on Tuesday, September 29 with Wisconsin Banking Association – Trust Board members and a representative from the Wisconsin Department of Revenue to get further clarification on the state’s position. I’ll report back after the call with an update.    

Post a Comment

Your email is kept private. Required fields are marked *


Scam Alert: MyFitnessPal health and fitness tracking app users are now phishing targets

Tuesday, June 19, 2018

The scam making news this week is a data breach with Under Armour’s health- and fitness-tracking app, MyFitnessPal.  A database with 150 million user names and passwords of the super popular MyFitnessPal app has been hacked. Cyber criminals use this to scare you into clicking on phishing emails and infect your computer with malware or manipulate [...]


Pre-Approval for Home Loans Helps Buyers Strengthen Their Offer

Tuesday, February 20, 2018

Nicolet Bank Provides Home Loans for Home Purchases and Remodeling The tight housing market in most parts of Wisconsin has created a situation in which the buyer who can move the quickest may end up with the prize. Pre-approval for home loans through Nicolet National Bank is an effective way to position yourself for fast [...]


Business Pulse - Cybersecurity has emerged as a major issue for CEOs

Monday, July 27, 2015

CEOs Express Concern about the Cybersecurity of their Business. Read the full report here. Business Pulse – JUNE 2015 EXECUTIVE SUMMARY CYBERSECURITY  

Nicolet Bankshares, Inc. 2nd Quarter 2015 Earnings Release

Tuesday, July 21, 2015

Nicolet Bankshares, Inc. (OTCQB: NCBS) earnings release for 2nd quarter 2015. 2Q15 Earnings Release

How to Ensure a Good Credit Score

Wednesday, July 8, 2015

First, let’s understand how your credit score is determined. Your credit score is broken down into five categories weighted accordingly: Payment history = 35% Total amount owed = 30% Length of credit history = 15% New credit = 10% Type of credit in use = 10% MAKE YOUR PAYMENTS ON TIME. This is the most [...]