The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing


Subject:  Re: IRA to Roth IRA Conversion Date:  7/29/2013  12:03 AM
Author:  Rayvt Number:  72705 of 88051

All of the income in the lower bracket still gets taxed at the lower bracket rate - including LTCG and dividend income at no tax.

Well, no. The LTCG and dividends are included in the taxable income, but the rate for them depends on your tax bracket.

For most people it doesn't matter, because most non-retired people with investments are well above the top of the 15% bracket.

Turbo tax was quite clear on this. I well know because I had to do some fancy footwork to stay in the 15% bracket the last 2 years.

Play with it in TurboTax (for 2012). Enter $10,000 of dividends and other income to get taxable income of $70,699 (married-joint). Then add $2 more income to bump the T.I to $70,701. The tax jumps a whole lot, because the entire $10K of dividends is now taxed.
Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us