All Posts

I am 72 years old and not sure how much to convert my relatively large traditional IRA to a Roth this year or for future years to be most tax efficient. Does Turbotax have any roth calculators to review various scenerios and tax consequences

• I need some advice on the IRS's treatment of this situation. Taxpayer worked for a company from 1968 until 1978 in Columbus, Ohio, Brussels, Belgium, and Walnut Creek, California. • He reached the age of 70 ½ in 2013 so his first withdrawal from their pension plan would have been 2014. After leaving the company in 1978, he has not had any contact from them over the years. The original company he worked for has changed hands multiple times, but his funds were passed down each time. On 1/9/24 he received a letter informing him he had benefits.   • Multiple telephone conversations, emails and postal mail attempts to understand amounts, set up distributions, or just figure out what was going on were unsuccessful. He has documented proof of these attempts to resolve this issue with ABB to no avail.   January 21,2025, ABB again sent him a letter trying to figure out how to distribute the funds due to him from past plans, etc. This time the communication was from another office or department and moving forward it was determined that he indeed had a pension plan that had been accruing interest and needed to be distributed. After many back-and-forth phone calls and emails, it was determined:   This was a Cash Balance Plan UNKNOWN IF QUALIFIED PLAN PER IRS DEFINITION   Back benefits will be calculated as of April 1, 2014, instead of the current date.  which would be past, retroactive payments and an interest payment verbally estimated in a phone conversation with Hope, the ABB representative, in the amount of $14,500 - Payment including interest. (NO IDEA WHAT THE SPLIT IS)   He also was asked to Certify that he has chosen the Single Life Annuity to begin on April 1, 2014 And that this option pays $110.90 per month starting April 1, 2014 –   133 MONTHS AT $110.90 = $14,749.70 PAID TO HIM     QUESTIONS: Is the distribution chosen the best option for him or is something else better? TOO LATE TO CHANGE NOW Will the back payment + interest - estimated at $14,500, require back taxes or amended tax returns for all these years?                                                                                                                          …….Or will this not be an issue since he did not receive any of these funds in prior years? Will IRS impose penalties on him for non-withdrawals of funds during these 10 years – 2014-2024  11 YRS TO 2025 If any penalties were imposed, would the company be liable for these penalties since they failed to contact him? Since he lived in California until 2017, would that part of that back retirement/interest payment be subject to California Income Tax? (Probably not since he didn’t take any distribution (OR IS THIS A CASE OF ALLOWED OR ALLOWABLE)