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Old 07-23-2021, 05:48 PM   #61
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Originally Posted by rathail View Post
Okay, I must be dense. What is the issue with the stimulus checks. They take the money back. I left off the one payed Dec. through Feb. (I got mine in Feb. 2021) so I did not count it for my 2020 taxes. I got a nice letter asking for that exact amount of money more from me. It is just a loan. The Feb. stimulus check was for one month before the IRS asked for it back.
If you had less than 150K income for a couple then the stimulus check was a tax free gift, not a loan, technically a refundable tax credit.

I watched carefully our income, and made sure the roth conversion didn't push us over the 150K.
It phased out pretty quickly and at $174K a couple got nothing, or had to repay it.
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Old 07-23-2021, 05:51 PM   #62
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Originally Posted by RetiredHappy View Post
Stimulus check is not a loan. Did you make too much 2019? I have not heard of people getting asked to return stimulus check.
I know they 'say' you don't have to pay it back. But turbo tax tried to get me to put the Feb 2021 funds in the 2020 return. It was a 1 to 1 difference. The 'loan' was my word, call it what you want but they get the money back. It did not reduce the first 2020 funds they paid out. Why did they send the second check out then?
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Old 07-23-2021, 05:56 PM   #63
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Originally Posted by rathail View Post
I know they 'say' you don't have to pay it back. But turbo tax tried to get me to put the Feb 2021 funds in the 2020 return. It was a 1 to 1 difference. The 'loan' was my word, call it what you want but they get the money back.
The point is that if you got it early, you don't also get it when you file your return. So yes, every dollar you got early is a dollar you don't get when you file. But you aren't paying anything back.
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Old 07-23-2021, 06:12 PM   #64
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Originally Posted by RunningBum View Post
How is this in any way related to Roth conversions? Start a new thread and be a little clearer with your info.
A number of posters were stating concerns about getting the stimulus checks. SORRY if I was wondering why.
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Old 07-23-2021, 09:04 PM   #65
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The only reason to I can think of to regret doing a Roth conversion is if your income ends up being too high and you get kicked into a higher tax bracket. I had that happen last year, due to a massively successful year with my side gig as well as an unexpected house sale. I had done a Roth early in 2019, based in my normal-ish income level. Since they had changed the law a couple of years earlier and got rid of the ability to recharacterize I was stuck.

Even so, I don't really regret it. I just regret paying more taxes than I'd have had to otherwise. I've learned my lesson. Since I have unforeseeable income I just need to wait until the last quarter of the year before I do the conversion.
Exactly the reason I schedule my Roth conversions in Dec. At that time I know approximately where I am tax wise.
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Old 07-23-2021, 09:26 PM   #66
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This will be the first year it makes sense to do a conversion for us. (DW’s SS & our taxable pensions mean we always have income that kills the lowest tax brackets if there is any other earned income). We are in the “sweet spot” until I decide to collect SS, which as mentioned by others as the “problem” , along with RMDs when they hit, provides significantly more income than we can use, which will grow in a taxable account, where we plan to have it earn lower taxed LTCGs.

The plan is to go up to the first IRMMA tier in December. There may be some added income this year so until I know that amount, I am waiting.
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Old 07-24-2021, 02:32 AM   #67
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Exactly the reason I schedule my Roth conversions in Dec. At that time I know approximately where I am tax wise.
Same here for my DGF.
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Old 07-24-2021, 04:48 AM   #68
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I split the difference. This year I did my Roth conversion in January but left some leeway for surprise income. I'll top it off in late December once I have a better read on our tax situation for 2021.
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Old 07-24-2021, 06:59 AM   #69
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No regrets. I love having all my non-taxable eggs in one Roth basket.
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Old 07-27-2021, 01:52 PM   #70
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Originally Posted by Safire View Post
I converted too much in 2020 and didn't qualify for the stimulus checks as a result. UGH.


I also missed out on stimulus checks due to Roth conversion.

Plus, after paying a substantial amount of income tax from my taxable account for the rollover, I now find myself facing substantial capital gains taxes in my taxable account if I want to rebalance the funds now sitting in the Roth to stocks - else suboptimize the Roth by holding cash or bonds there.
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