IRA Roth Conversion

Submitted by Rose Shy on Mon, 2018-10-29 13:23

Is the amount of the Roth conversion included in your MAGI. I am a single widow and wanting to stay

below $85,000 for my MAGI.



Submitted by tomd37 on Mon, 2018-10-29 16:39

A Roth conversion amount is included in your MAGI.  I assume here that your converted amount does not include any non-deductible contribution amount.  With the stated $85K dollar amount I suspect you are attempting to stay under the MAGI amount above which monthly medicare premium costs would rise to the next level.   Tom D.

Submitted by Rose Shy on Mon, 2018-10-29 23:59

Thank you. 

Submitted by Alan - IRA critic on Mon, 2018-10-29 18:29

  • Tom is correct, and you obviously are asking about the IRMAA thresholds. However, all MAGI definitions are not the same. The conversion does count for IRMAA MAGI, but does not count for purposes of the MAGI definition to make a regular Roth IRA contribution for the year. 
  • Inflation adjustments of IRMAA thresholds return in 2020, so while your MAGI for 2018 applies to your Parts B and D premiums in 2020, the 2020 threshold might be slighly higher than 85k due to the inflation adjustment. But I would not assume an increase for 2020 and you should plan on keeping IRMAA MAGI in 2018 somewhat less than 85k to give yourself a margin for error since exceeding the ultimate threshold by even a dollar results in your entire premium being subject to the surcharge. And effectively you could look at any IRMAA surcharge as increasing your marginal tax rate for the entire conversion.

Submitted by Rose Shy on Tue, 2018-10-30 00:01

Thank you. I will again keep it below $85,000 this year. 

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