More Roth IRA conversions allowed...

New tax rules allow more people to convert to a Roth IRA
By David Pitt, AP Personal Finance Writer

In retirement, your paycheck might go away, but taxes won't. Still your tax bill can be hard to predict. To have some control over how much you pay the government each year, you should have both taxable and non-taxable accounts from which to draw your retirement income. Imagine it this way. Perhaps early in retirement you choose to continue to work part time and supplement your income from retirement savings accounts. The combined income may put you into a higher tax bracket. However, if you take some money from a Roth IRA that year, because withdrawals are nontaxable, it could help keep you in the lower bracket.

In later years if you're not working and hitting the next highest tax bracket isn't an issue, you can pull more money from a traditional IRA or 401(k) account. This type of tax diversification is one of the primary reasons people choose to put some of their money in a Roth IRA, or convert to such an account. "It affords you the flexibility when the time comes to make a withdrawal from an account that lines up best with your current taxes," said Chris McDermott, a senior vice president at Fidelity Investments.

Thanks to a new rule that goes into effect in January, more people can convert assets from a traditional IRA or a 401(k) account, at a former employer, into a Roth IRA. As of Jan. 1, people making more than $100,000 may convert to a Roth IRA. Previously, only people who earned less than $100,000 could convert. - complete article

New Tax Changes to Connecticut Personal Income Tax (Individuals)...

The new law increases the marginal personal income tax rate from 5% to 6.5% for:
• joint filers with taxable incomes over $1 million;
• heads of households with taxable incomes over $800,000; and
• single filers and married individuals filing separately with taxable incomes over
$500,000.
The legislation also increases the flat income tax rate for trusts and estates from
5.0% to 6.5%.

IRS Alerts Public to New Identity Theft Scam...

WASHINGTON — The Internal Revenue Service reminds consumers to avoid identity theft scams that use the IRS name, logo or Web site in an attempt to convince taxpayers that the scam is a genuine communication from the IRS. Scammers may use other federal agency names, such as the U.S. Department of the Treasury.

In an identity theft scam, a fraudster, often posing as a trusted government, financial or business institution or official, tries to trick a victim into revealing personal and financial information, such as credit card numbers and passwords, bank account numbers and passwords, Social Security numbers and more. Generally, identity thieves use someone’s personal data to steal his or her financial accounts, run up charges on the victim’s existing credit cards, apply for new loans, credit cards, services or benefits in the victim’s name and even file fraudulent tax returns.

The scams may take place through e-mail, fax or phone. When they take place via e-mail, they are called “phishing” scams. The IRS does not discuss tax account matters with taxpayers by e-mail. The IRS urges consumers to avoid falling for the following recent schemes: