Originally Posted by FinanceDude
Harley, a little cautionary help for you. Check to make sure your STATE is following the federal guidelines. If they don't (like Wisconsin,
) you could face some hefty state taxes on top of the federal tax.
Would hate to have someone move up a bracker or two AND have to pay 5-7% tax or higher because they acted too quickly........
Good call. DD is in the top tax bracket in VA (even though she is pretty poor
). Everything is taxed at 5.75%, including LTCGs. She'll have to use part of the gift to pay the tax, but it's still the best deal we're going to get.
Bikerchick, I agree with Kaneohe. 2010 is really only a big deal for those who were previously unable to convert. I don't even think the opportunity to spread the taxes over 2011-2012 is going to be much of a deal, since I expect tax rates to increase by then. JMO, though.
Still, I'm fully on the Roth bandwagon, and think that converting even small amounts every year will pay off in the long run. Of course, if "they" switch to something like a VAT instead of income tax I won't be in as good shape. No way to tell.