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Financial Planning / Tax Strategies


Subject:  Re: Roth Conversion Date:  12/3/2021  6:16 PM
Author:  YewGuise Number:  133269 of 134394

I did a significant conversion (traditional IRA to Roth IRA) during the market nosedive of March 2020.
I moved cross-country in July 2020 (state A to state B).

When doing taxes, I divvied up what I earned while in A vs what I earned while in B. I put the conversion into the A category, and paid state taxes on it to A.
Both states have almost identical tax rates, so it made no difference to me who got the state tax payments, but the residency criterion made sense and appeared to be the way both states wanted it done.

In your case, waiting until 2022 will make the arithmetic a little easier. But, the lower the value of your account, the greater percentage of it you can convert while staying under your (self-imposed) federal tax limits. So, assuming your account is in equities, if you feel it dips significantly in December, I’d go ahead and pull the trigger.
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