<<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.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar<