Let’s explore the role of Roth conversions and shed light on the impending sunset of the Tax Cuts and Jobs Act (TCJA). Roth conversions have gained popularity due to their potential to provide tax-free retirement income, while the eventual sunset of the TCJA may impact tax planning strategies. Let’s dive into the details!

1. Understanding Roth Conversions

Roth conversions involve moving pre-taxed funds from a traditional retirement account, like a 401(k) or traditional IRA, into a Roth IRA. This conversion incurs taxes on the converted amount, but the funds grow tax-free moving forward, making it an attractive option for long-term retirement planning.

2. Tax-Free Retirement Income

One of the main advantages of Roth conversions is the ability to create a source of tax-free income during retirement. Since Roth IRAs don’t require mandatory minimum distributions (RMDs) like traditional IRAs, you can let the funds grow for as long as you wish without worrying about tax implications.

3. Capitalizing on Lower Tax Rates

The TCJA, enacted in 2017, introduced lower tax rates for many individuals and businesses. As a result, some taxpayers may have benefited from reduced tax burdens. However, the TCJA was not a permanent change and is set to sunset, which could impact tax planning strategies in the future.

4. The Sunset of the TCJA

The sunset provision in the TCJA means that the reduced tax rates and various deductions it brought will revert to pre-2018 levels unless Congress takes action to extend them. This scheduled sunset at the end of 2025 raises questions about how it might affect retirement planning and tax management strategies

5. Factors to Consider

When deciding on Roth conversions, several factors come into play, such as current tax bracket, future expected tax rates, and financial goals. Consulting with a financial advisor or tax professional can be beneficial in making informed decisions.

Roth conversions can be a powerful tool for managing tax-free income in retirement, providing a buffer against future tax rate changes. As the sunset of the Tax Cuts and Jobs Act approaches, it becomes crucial to evaluate tax planning strategies and consider if Roth conversions align with your long-term financial goals.


A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.
All investing involves risk including loss of principal. No strategy assures success or protects against loss.
Traditional IRA account owners have considerations to make before performing a Roth RIA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA
The options voiced in this material are for general information only and are not intended to provided specific advice or recommendations for any Individual. To determine which strategies or investment may be suitable for you, consult the appropriate qualified professional prior to making a decision. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.