As 2018 comes to a close, here are some important things to think about regarding Roth Conversions...
- Consider conversions up to the end of your tax bracket. In other words, if you’re in the 22% tax bracket, stay there!
- Make sure you consider other income before you calculate how much you’ll take. include interest dividends, capital gains, business income, royalty income, rental income, etc.
- If you’re able to contribute to a Roth, do this first. Couples over 50 can contribute $6,500 each or $13,000 total.
- Re-characterizations are no longer available so once you do this your tax obligation is locked in.
- If you are receiving Medicare “B” or “D” make sure you do not incur additional premiums for high income recipients. This starts for singles with modified adjusted income above $85,000 plus joint filers with modified AGI above $170,000.
- Beware of the net investment income tax for couples with AGI’s over $250,000 and singles with AGI’s over $200,000.
We trust that you've found this information useful, and best wishes for a great 2019!