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Beginning in 2007: Directly Deposit Your Tax Refund Into IRA
Starting with your 2007 Form 1040, you'll be allowed to directly deposit all or part of your federal income tax refund into your IRA or your spouse's IRA if you file jointly. The IRS will issue a new form to make this possible.
Beginning in 2007: New Inflation Adjusted Phase out Ranges for IRA Contributions if you earn a healthy income, you may have been prevented from making deductible contributions to a traditional IRA or after-tax contributions to a tax-free Roth IRA. Why? Because income-based phase out rules can whittle down or eliminate your contribution privilege. Starting next year, the PPA requires the income-based phase out ranges to be adjusted for inflation, which will allow more folks to contribute to the IRA of their choice.
Beginning in 2008: Direct Rollovers from Retirement Plans into Roth IRAs Allowed.
Beginning in 2008, you'll be able to make a direct (trustee-to-trustee) rollover of a distribution from your retirement plan into your Roth IRA. This new "Roth conversion" privilege will be available for money coming out of: (1) a qualified retirement plan, such as a 401(k), (2) a Section 403(b) tax-sheltered annuity arrangement, or (3) a governmental Section 457 plan. Of course, you'll have to pay any taxes due on the amount converted to Roth status. There's another fly in the ointment: for 2008 and 2009, you'll be ineligible for the Roth conversion privilege if your modified adjusted gross income exceeds $100,000. Starting in 2010, however, the $100,000 limitation is scheduled to disappear. So everyone will eventually be eligible for Roth conversions, regardless of income.
Note: Under the current Roth conversion rules (which will continue to apply through the end of 2007), it takes a two-step procedure to convert an amount distributed from a retirement plan to Roth status. You must first roll over the distribution into a traditional IRA. You then convert the traditional account into a Roth account. After 2007, this two-step drill won't be necessary. Read Full Story
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http://www.smartmoney.com/taxmatters/index.cfm?story=20060821
