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Writing for Morningstar, Natalie Choate Evaluates the Tax Cuts and Jobs Act

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Natalie Choate, a member of Nutter’s Private Client Department, wrote an article that elaborates on how the Tax Cuts and Jobs Act affects retirement benefits. In the article, “What the Tax Cuts and Jobs Act Means for Retirement Benefits,” Natalie examines the elimination of the right to undo (“recharacterize”) a Roth IRA conversion. Though the law is now in effect, Natalie elaborates that what's not clear yet is how the law impacts 2017 conversions. Under previous law, the 2017 conversion of a traditional plan or IRA to a Roth IRA would have been reversible (i.e., the converter would have been entitled to recharacterize it) until Oct. 15, 2018. The new law repeals that right for "taxable years" after 2017. Some hope this means that conversions that occurred in tax year 2017 can still be reversed by the October 2018 deadline, but the law could be read as accelerating the recharacterization deadline for 2017 conversions to Dec. 31, 2017.

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