DH & I currently have no Roths. We ER'd at 56 & 57 in 2016, but deferred comp payouts in 2017 & 2018 plus interest income put us into the 22% bracket so we have not done any conversions yet. Even if we will be in the 24% bracket with eventual RMD's, it doesn't seem worth it to do Roth conversions for that small benefit.
Am I correct that in order to stay in the 12% bracket and have 0% tax on dividends and LTCG, our MFJ income can be up to $101,200 ($77.2K+$24K)? However this income limit INCLUDES dividends and capital gains, correct? So for example, if our dividend income is $80K, then we could only do a $21K Roth conversion to stay in the 12% bracket - is that right?
If that is correct, I'm really not sure it's worth it for us to do Roth conversions. Even after 10 years, the % converted would be really low. And we'd have a lot more complexity ... right now each of us only has one tIRA account.
Please let me know if my thinking is off on this.
Am I correct that in order to stay in the 12% bracket and have 0% tax on dividends and LTCG, our MFJ income can be up to $101,200 ($77.2K+$24K)? However this income limit INCLUDES dividends and capital gains, correct? So for example, if our dividend income is $80K, then we could only do a $21K Roth conversion to stay in the 12% bracket - is that right?
If that is correct, I'm really not sure it's worth it for us to do Roth conversions. Even after 10 years, the % converted would be really low. And we'd have a lot more complexity ... right now each of us only has one tIRA account.
Please let me know if my thinking is off on this.