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<<Would it make any sense to make a deductible IRA contribution for 1997 and then convert it to Roth in 1998? It happens that '98 is the year in which I expect to earn the least, so it's possibly to my advantage to pay the tax on the conversion from '97 only (which would hardly have appreciated at all) rather than make the '97 contribution non-deductible.>>

Possibly, but only if you plan on also contributing additional money to a contributory Roth IRA in 1998. That would give you the ability to get up to $4K in the converted and in the contributory Roth IRAs in the same year. But it could work against you, too. If you convert a traditional IRA in 1998, you must spread the income that conversion creates over a four year period and pay taxes in each of those years at the marginal rate for those years. So in 1997 you save $300 in taxes at a 15% tax bracket just to pay $560 in a 28% bracket over the next four years. Doesn't seem worth it to me because the sole advantage is to get more money into the Roth vehicles early. From what you say, you probably can't afford that.


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