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Roth conversions
Old 05-07-2019, 01:06 PM   #1
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Roth conversions

Beginning at 59.5 if I convert max portions of my tIRA to a Roth and pay due taxes is that amount I converted considered income?
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Old 05-07-2019, 01:10 PM   #2
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I believe so.
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Old 05-07-2019, 01:11 PM   #3
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I finally found my answer. Yes, it is income.

(Mods delete if you'd like)
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Old 05-07-2019, 01:12 PM   #4
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Quote:
Originally Posted by COZICAN View Post
Beginning at 59.5 if I convert max portions of my tIRA to a Roth and pay due taxes is that amount I converted considered income?
Yes, assuming that the tIRA was all deductible contributions or pre-tax 401k money rolled over into the tIRA, any withdrawals, including Roth conversions would be income for tax purposes.
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Old 05-07-2019, 01:16 PM   #5
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It is not, however, considered earned income by which you could qualify for an annual IRA contribution.
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Old 05-07-2019, 01:22 PM   #6
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It depends on the purpose that you are asking. Most tax things that depend on income will have a specific context-specific MAGI definition.

For expample, I just learned recently that the MAGI limits for Roth IRA contributions do not include the income from Roth conversions.

The MAGI for ACA premium subsidies, on the other hand, will include Roth conversions.

The term "MAGI" is common, but the meaning is different depending on the application.

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Old 05-07-2019, 01:31 PM   #7
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"The MAGI for ACA premium subsidies, on the other hand, will include Roth conversions."

This was my concern
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Old 05-07-2019, 04:11 PM   #8
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"The MAGI for ACA premium subsidies, on the other hand, will include Roth conversions."

This was my concern

Since you can no longer recharacterize a ROTH conversion you need to be very careful on how much you convert so that it doesn't take your MAGI over the ACA cliff. Need to leave a good buffer on how much you convert and/or wait until the end of the year to do the conversion when you'll have a better idea what your total income (MAGI) will be, including Dividends, Capital Gains, Roth Conversions, etc..
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Old 05-07-2019, 04:31 PM   #9
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Since you can no longer recharacterize a ROTH conversion you need to be very careful on how much you convert so that it doesn't take your MAGI over the ACA cliff. Need to leave a good buffer on how much you convert and/or wait until the end of the year to do the conversion when you'll have a better idea what your total income (MAGI) will be, including Dividends, Capital Gains, Roth Conversions, etc..
Good advise, thank you. Seeing as how I will have no earned income after 59.5 I don't believe I can do it anyway.
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Old 05-07-2019, 05:06 PM   #10
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Good advise, thank you. Seeing as how I will have no earned income after 59.5 I don't believe I can do it anyway.
? Can't convert? Of course you can.
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