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|Subject: Tax implication of roth conversion||Date: 4/17/2010 8:56 PM|
|Author: jmbooth2000||Number: 66961 of 77238|
I'm looking into the possibility of converting a IRA to a ROTH IRA this year. At first glance this seemed like a good idea (I expect to be in a equal tax bracket in retirement and I'm betting tax rates will rise). I ran one of the calculators and sure enough it showed that I would be ahead by a small amount even if tax rates remained the same.
The problem is when I looked at my tax return I realized that I'm already loosing part of the Child Tax credit (I have 2 children which equals 2000 but as my AGI was just over 112000 I lost 150 of this credit). If I'm reading things correctly the ROTH conversion essentially counts as additional income so I will loose even more of the child tax credit. In order to make an accurate choice I need to take into account the lost child tax credit.
I guess my question is are there any other credits I should be aware of that I might be in danger of loosing and has anyone seen a spreadsheet / calculator that takes the tax implications into account?
I may choose to do the conversion anyway on the basis that I suspect taxes will rise and even if I stay in the same bracket I'll be worse off.
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