gooddog
Recycles dryer sheets
"would it make sense to do ROTH conversions"
Wasn't part of the new administrations goals to end Roth conversions?
Wasn't part of the new administrations goals to end Roth conversions?
Not that I've heard. Backdoor Roths, yes."would it make sense to do ROTH conversions"
Wasn't part of the new administrations goals to end Roth conversions?
Thanks again to all.... this will take me a while to digest all of it. I have made it this far in life and never had to think about tax brackets... :-( But as people often say: these are good problems to have.
What is a good amount to leave in the IRA ? I got 1.6M in TIRA, low 22% bracket, age 52 and just converted up to mid 24% tax bracket today. I think 22% bracket will go up to 25% in 2026.
Just a reminder valid for 2021: If your AGI for 2021 thanks to the Roth conversion puts your AGI over $150k for MFJ, you will forfeit the $2800 stimulus check from earlier in the year rebate when filing, IF you didn’t get a check, due to 2019/20 income. I don’t think they take back the amount if you had a direct deposit in March, but others might know better.
I was planning to convert to the first IRMAA level, ($172k) before I realized this, so it doesn’t make sense for me to lose $2800 in order to convert an extra $22k.
I’ve never gotten any stimulus checks, so it would be nice to get the rebate this year.
Great answer, including all of the specifics that I edited out for brevity.It's not a simple answer. It is affected by many things, a lot of which are unpredictable or personal goals and beliefs. Some relevant items.
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Great answer, including all of the specifics that I edited out for brevity.
For myself, I think a good amount to leave in the tIRA is $0, if I can get there with tax efficient conversions. If somewhere down the line I have large LTC expenses to deduct, I'll sell from taxable to pay for them and deduct the expenses from the LTCG income. That seems better to me than taking RMDs for years until I might need LTC, especially since I might not ever need it.
"would it make sense to do ROTH conversions"
Wasn't part of the new administrations goals to end Roth conversions?
The real sweet spot for doing low tax-cost Roth conversions is in the 10% and 12% tax brackets if you'll be in the 22% tax bracket once pensions, SS and RMDs are going.
If you're already in the 22% tax bracket are going then there is a lot less benefit unless your tax deferred accounts are huge. Similarly, if will be in the 12% tax bracket once RMDs are going then there isn't much bang for the buck from Roth conversions, but it doesn't hurt either.
It seems unfair if getting the check vs as a rebate against taxes are treated differently. I searched in the Block tax software for "stimulus" and "impact" and didn't get any hits. Maybe they'll update it in January and give me the bad news then.I don’t know if they do a clawback for a check already received. I get mine as a rebate against FIT due. But yes, one of the forms will ask if you received a stimulus check. If you did not, then it calculates the amount if credit you are due based on your current AGI.
Search for Economic Impact Payment (EIP) or Recovery Rebate Credit.It seems unfair if getting the check vs as a rebate against taxes are treated differently. I searched in the Block tax software for "stimulus" and "impact" and didn't get any hits. Maybe they'll update it in January and give me the bad news then.
Thanks for that clarification. I did get the check, so I'm out of the woods.The Recovery Rebate Credit (EIP#3) has no clawback. It is like the previous 2 RRCs, if you got the check based on previous year's income, then they let you keep it even if your AGI >150k MFJ for that tax year. But if you did not get a check or only received a partial credit, then keep your 2021 AGI below the limit to receive the remaining portion of the 2021 credit as part of your tax return.
We too are doing yearly Roth Conversions to the top of 24%, we are retired, I am 65 & DW is 60. I being the higher earner will claim my SS at age 70, & she will claim at 62.
We do not need her SS income for living expenses per se, but as per Open Social Security, 62 is the right age for DW to claim.
I'm not sure anyone in Congress will want that to happen on their watch, but it will probably be easier to let it happen than to work together to keep it from happening.I think 22% bracket will go up to 25% in 2026.