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You’ll owe income tax on the amount you convert from a traditional IRA or 401(k) to a Roth IRA, since you’ve never paid tax on that income. The amount you convert is added to your gross income ...
Your tax rate is the marginal tax rate on the amount of your income including the amount of the conversion. If there are any non-deductible funds in your traditional IRA or 401(k), they may have a ...
It’s important to note that a traditional IRA or traditional 401(k) that has been converted to a Roth IRA will be taxed and penalized if withdrawals are taken within five years of the conversion ...
“For example, a current oil and gas investment conversion allows for 60 cents on the dollar in tax mitigation, meaning you’re only taxed on 40% of the amount being rolled into the Roth IRA ...
A Roth conversion doesn’t make sense for everyone, so it’s a good idea to speak with a financial advisor or a tax expert before making the move. Benefits of a traditional IRA
They think their tax rates will be higher in retirement, so they’d like to convert that to a Roth. They make $150,000 annually, putting them in the 24% bracket.
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