Future Opt Out Lump Sum tax checkbox


Thinks s/he gets paid by the post
Nov 21, 2011
Leave it to Congress to wait until the last moment (April 1) for an important tax election. If you have not yet filed your 2023 tax return, you can use the recently updated Form 1040 that adds a Future Opt Out Lump Sum checkbox. With this election, you can opt out of future income taxes on all your traditional retirement accounts, but there is a catch: you must also surrender your Social Security benefits beyond age 73.5. This election will convert all your traditional IRA and 401(k) accounts into Roth form in one lump sum, with zero tax due. There is no need to perform a conversion or rollover as the account custodian will automatically handle it for you later this year if you elect the option. This conversion to Roth will also be exempt from state and local income taxes. By eliminating later Social Security payments to those with substantial retirement savings, this plan is projected to ensure the Social Security trust fund's solvency through mid-year 2056. If you have already filed your 2023 return, you can file an amendment but will need to give up Social Security beyond age 72.5. However, you can add a year back to the age if you have a mortgage on your primary residence. Details are expected at the SSA and IRS web sites soon.
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