Will my IRA make me ineligible for the Senior Freeze?

Will my IRA make me ineligible for the Senior Freeze? ...

Q. Under both scenarios, my base year property taxes are $6,000. My current property tax assessment is $10,000, resulting in me becoming eligible for a $4,000. I may convert my IRA to a Roth. However, it would make me out eligible for the Senior Freeze. I'm also able to keep an alternative base year of $10,000.


A. Let's go over how the Senior Freeze works.

As of December 31, 2019, this form is available to residents of New Jersey aged 65 or older who are eligible for federal disability benefits.

According to Claudia Mott, a certified financial planner with Epona Financial Solutions in Basking Ridge, you must have lived in New Jersey for the last ten years either as a homeowner or a renter.

She said there is also a three-year residency requirement.

Handy, you must have lived in your house prior to December 31, 2016 and remained in the house until December 21, 2020, she said. Property tax payments or mobile home site fees must be up-to-date..

She said the total for 2019 is $91,505 and for 2020 it is $92,969. This limit applies irrespective of your marital or civil union status as long as you both lived in the same household as of December 31.

Mott said that once a resident is enrolled in the program, they will receive a personalized copy of a form PTR-2 that must be updated to reflect current income and property tax information. All applications must be filed on or before October 31, 2022, according to Mott.

"In the event your income exceeds the expectation and you are unable to submit a request, the process of determining your base tax rate will begin afresh with the next application year that you qualify," she said. "All payments made will be calculated using the revised base.

Bear in mind that the income requirement is based on the two most recent tax return statements.

While converting the IRA may help you save on income taxes down the road, you should consult with a tax advisor to determine if a full conversion will actually cost you more than what you might save over time as a result of the differences in the tax rate applied to the conversion versus the rate you would pay with a regular required distribution, according to Mott.

Considered in this evaluation the possibility of a $4,000 loss or more in the event that you would forego as a result of the conversion, according to the author.

If you have any questions, please contact us.

Karin Price Mueller writes a column for NJ Advance Media and is the founder of Follow NJMoneyHelp on Twitter Find Sign up for the's.'

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