Roth Conversions up until NIIT hits?

[DawgMan]

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Originally Posted by DawgMan Actually, it also includes dividends and interest. Dinkytown calculated it correctly.

Disregard… I quickly read your comment on my phone without my glasses and misread it!

[audreyh1]

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Originally Posted by DawgMan Disregard… I quickly read your comment on my phone without my glasses and misread it!

I may have fooled you temporarily as I had to correct something.

[Whisper66]

DawgMan - I initially limited my yearly Roth conversions to the NIIT limit. I found that my IRA kept growing so fast that I wasn't making the progress I wanted to before RMD's would kick in. To control future tax rates I needed conversions to exceed the NIIT limit. In my case I convert to the top of the 24% bracket. Each year I run I-ORP extended version to test how much it would suggest I convert. I find it always suggests at least the 24% bracket maximum for my specific situation. I also recognize these tools only use available info on tax rates. So I-ORP uses current tax rates and includes the 2026 sunset of existing lowered tax rates. I am of the opinion that tax rates will likely be further raised in future years to help pay the ever increasing federal debt. If that is correct, I-ORP should underestimate the benefit of convertions. So I'm fine converting more than the NIIT limit.

[Whisper66]

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Originally Posted by DawgMan I used https://www.calculator.net/, which shows an NIIT line item so I assumed it would calculate it. What tax calculators have you found to be more accurate?

FWIW - Here's the calculator I keep coming back to. Easy to use, updated for tax codes as they change, and accounts for NIIT properly.

[Exchme]

I you are looking at 35% in the future, I would bite the bullet and go to the top of the 24% bracket each year until IRMAA kicks in and then re-evaluate. Otherwise you are also giving up Roth Conversion space above the point where all your investment income is has had NIIT phased in.

So your net tax cost for pushing through NIIT will not be 27.8%, it will be between 24% and 27.8%, depending on how much of your investment income is qualified dividends and LTCGs.

[Dash man]

I don’t consider NIIT a roadblock and I figure IRMAA is pay it now or pay it later. Planning to live longer than I probably will, but DW still has her dad at age 89 and recently lost her mom at age 86. So we need to plan for her being around awhile.
We convert at least to the top of the 24% bracket and this year a little into the 32% bracket because prices have fallen and the TCJA is sunsetting after 2025. We want to get our tIRA balances down to where charitable donations can use up our RMDs. Two more years may do it. Three at most. But no 32% bracket infringement after this year.

[MarieIG]

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Originally Posted by audreyh1 I may have fooled you temporarily as I had to correct something.

Ahhhhh, ok, I thought my short term memory had left the building . . .

[Winemaker]

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Originally Posted by DawgMan Is there really any advantage to converting one spouse's account before the other's if you are the same age? I am a little surprised the NIIT limits have not increased in similar fashion to other income tax brackets (i.e. AMT)... but then again, should I be surprised?

DW is 2 years older than I. I'm also trying to simplify tax paperwork.

NIIT includes divvies, cap. gains and rental income. Unless I 1031 one of my properties in the next 5 years, I will lose about $5,000 of depreciation expense.