Six Tips on Year End Roth Conversions

Things to think about when considering year end Roth conversions

As 2018 comes to a close, here are some important things to think about regarding Roth Conversions...

  1. Consider conversions up to the end of your tax bracket. In other words, if you’re in the 22% tax bracket, stay there!

  2. 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.

  3. If you’re able to contribute to a Roth, do this first. Couples over 50 can contribute $6,500 each or $13,000 total.

  4. Re-characterizations are no longer available so once you do this your tax obligation is locked in.

  5. 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.

  6. 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!


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