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Here’s how to use a Roth IRA conversion to set up tax-free income for your retirement. ... filing jointly will pay an additional $69.90 to $419.30 on top of their standard monthly Part B ...
Using the pro-rata rule, the nontaxable portion of that conversion would be $6,250 (25% x $25,000), and the rest would be added to her taxable income for the year.
However, a Roth conversion also comes with immediate tax consequences that require careful planning. Read Next: Suze Orman’s Top 5 Tips That Will Save Retirees From Financial Disaster
A Roth conversion may make sense with tax rates set to rise The Trump tax cuts are already scheduled to “sunset” at the end of 2025, unless Congress acts to extend them.
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
One problem investors face when planning a Roth rollover or conversion is the income limits that apply to contributions if your adjusted gross income (AGI) from your tax return is more than ...
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