In November, we distributed an article titled, “Roth IRAs: To Convert or Not to Convert, That is the Question,” (http://www.michaelbest.com/roth-iras-to-convert-or-not-to-convert-that-is-the-question/) describing an opportunity beginning on January 1, 2010, that allowed all taxpayers to convert a regular individual retirement account (IRA) to a Roth IRA. At that time, Wisconsin tax law did not comply with federal tax law on conversion, and the uncertain Wisconsin tax consequences from conversion may have caused Wisconsin residents to resist converting. On March 15, Wisconsin Governor Jim Doyle signed a bill that brings Wisconsin income tax treatment of Roth IRA conversions in compliance with federal income tax treatment. The state Assembly and Senate passed the bill in February.
The decision to convert regular IRAs to Roth IRAs should be made by taxpayers in conjunction with their accountant, IRA provider and estate planning attorney. If you have questions or would like assistance with the decision to convert, please contact the author or one of Michael Best’s Wealth Planning attorneys.