UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next
Author: tc001 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75649  
Subject: Re: Roth conversion in 98 or 99 Date: 3/13/1998 11:32 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
<<Do I convert in 98, which will be a low agi,but next three years will be big agi's or do I wait until 99 and plan on a low agi (15%)?>>

In the first half of the question you imply that '99 would be a big AGI, but then say that by waiting to convert until '99 you would plan on a low AGI. Can you control your '99 income to be high or low? What am I missing here?

<<Is the tax on the converted IRA amount found by multiplying 15 times the amount for 99?>>

It would be 0.15 times income (or 15%), not 15 times income. BUT, that's only if you are certain ALL your income will be in the 15% bracket for 1999, which *must* include the total amount you are converting to a Roth (since it will be counted as income). Refer back to my confusion on the first question.

However, if you are sure that 1999 will be a low income year (nothing above the 15% bracket) and that 2000 and 2001 will be higher income years (28% bracket or higher), then it make sense not to convert in 1998 and pay the whole tax in 1999 at 15% rather than part of it at 28% or more.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Apple

Apple and Ninety Years Ago
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement