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|Subject: Re: IRA to Roth IRA Conversion||Date: 7/29/2013 11:01 AM|
|Author: Rayvt||Number: 72709 of 73911|
Peter, I don't mind a pro pulling rank & telling me I'm all wet. That challenges me to dig in and figure it out from the ground up.
So I went to 2012 TurboTax and plugged in various scenarios. Imagine my shock to discover that [some] stuff I'd been reading on the internet was wrong!
It's not as bad as I thought, and it's not as good as I understood Peter to say.
After playing with Turbotax and carefully reading the IRS forms, the truth appears to be this:
1) Compute your taxable income without dividends[*].
2) The amount of dividends[*] that are taxed at 0% is that amount which brings your taxable income to the top of the 15% bracket. (70,700 in 2012, 72,500 in 2013, for MFJ)
3) All dividends above that are taxed at 15%.
2a) If your taxable income without dividends is already more than 70,700, then all the dividends are taxed at 15%.
[*] Strictly: long-term capgains plus qualified dividends.
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