The clock is ticking for you to use one key strategy for your individual retirement accounts before it disappears for good.
If you converted money in a traditional IRA to a post-tax Roth IRA in 2017, you have until Oct. 15 to undo that transaction.
But this will be the last year that you can change your mind. That is because the Tax Cuts and Jobs Act that was passed last year eliminated the ability to reverse an IRA conversion in 2018 and beyond.
“At a minimum, you should evaluate it to see if you want to keep it,” said Ed Slott, founder of Ed Slott & Co. and an expert on IRAs.
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Moving funds from your traditional pre-tax IRA to a post-tax Roth IRA generally leaves you with a tax bill for the money that is converted. Then, when you eventually withdraw those funds from your Roth IRA in retirement, you will not have to pay tax on that money.
Because the market has mostly been up, your retirement investments most likely have also seen a boost.
“If you have that 2017 conversion in the market and you made a lot of money, leave it alone,” Slott said. “That’s all tax-free gains.”
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