Roth conversions

[COZICAN]

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?

 

[SumDay]

I believe so.

 

[COZICAN]

I finally found my answer. Yes, it is income.

(Mods delete if you'd like)

 

[pb4uski]

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.

 

[GrayHare]

It is not, however, considered earned income by which you could qualify for an annual IRA contribution.

 

[gauss]

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.

-gauss

 

[COZICAN]

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

This was my concern

 

[zinger1457]

"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..

 

[COZICAN]

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.

 

[RunningBum]

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.