Maximum Traditional IRA (TIRA) to Roth Conversion Amount and 2018 Alternative Minimum Tax (AMT)
I plan to convert a larger amount of my TIRA to Roth IRA over the next years. What can be the maximum amount I could transfer in 2018 without kicking in the AMT? My wife and I are retired and file “married filing jointly.” Also appreciate input relative to doing larger transfers going forward after 2018. All of this assumes I would have sufficient resources from taxable account(s) to cover the increased tax burden each year. Present strategies include considerations of not passing the 24%, or possibly 32% or even 35% brackets.
Permalink Submitted by Alan - IRA critic on Sun, 2018-11-25 21:41
Permalink Submitted by tomd37 on Sun, 2018-11-25 22:25
Would the poster’s age play a role in this conversion? If he is drawing social security benefits could the amount of conversion in any given year increase the medicare premium cost in future years? Tom D.
Permalink Submitted by Alan - IRA critic on Mon, 2018-11-26 02:13
Yes, the IRMAA surcharge thresholds should be considered when planning conversion amounts. The additional surcharges can be treated the same as additional taxes when comparing the tax rate for conversions with the expected tax rate later in retirement. If AMT applied those taxes (with or without IRMAA) would also be considered.