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Author: christopayne One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75335  
Subject: IRA to Roth dilemma Date: 11/15/2001 1:34 PM
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Hi all,

First I wanted to say I love this place! The Fool is the greatest, been lurking for awhile, finally decided to post a question...ahem.

I'm debating whether or not to convert my small IRA (~$1600 - I just got started) into a Roth. I definitely meet the requirements, and I can pay the taxes with other moneys, but here's the thing:

I put the brunt of the money in the IRA this year, so I was looking for a nice little deduction for the upcoming tax season. If I convert, I'll have to pay taxes - but will those taxes cancel out my deduction? Can I still even take a deduction if I convert? Since the amount of money is so small, I figured taxes wouldn't be very much, and it'd be worth it either way, but I may be overlooking something.

I forgot to mention that I definitely expect to be in a higher tax bracket in the coming future - I'm making good money, but I only started in June, so my income will be about half what it should. My biggest issue is that I'm trying to get as many deductions as possible this year, since I just got married and am not looking forward to the dreaded penalty.

Finally, I was wondering if I should do it before the end of this year, or wait till January to put off having to pay the taxes, and still get my deduction. Thoughts?

I'm guessing the responses will be overwhemingly "Convert!", but I just wanted some extra guidance.

Thanks again,
Chris
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