9 Easy Ways to Reduce Your Tax Bill Series - Tax Tip #6

Over the next weeks we are going to provide you 9 easy ways to reduce your tax liability - 2016 Edition. Every Monday and Wednesday we will be posting a new tip, so stay tuned!

Tax Tip #6

De-characterization of Roth rollovers. Many people have converted monies from an IRA to a Roth IRA, and have also inherited taxable IRAs from a relative who has passed away. This leaves them exposed to an unintentional tax bill. If you rolled money to a Roth during the year, the IRS will allow you to “unroll” that Roth back to regular IRA under certain circumstances. So, don't feel that because you've converted money to a Roth IRA, and then had another tax anomaly take place, that you're stuck with that conversion. Once a year, you can “un-Roth” money back to an IRA to undo a taxable event.