Roth Conversion Question
We have a client who has a traditional IRA valued at $38,000. He wants to convert it to a Roth. Would he have to convert the full $38,000 this year or could he do half this year and half next year?
We have a client who has a traditional IRA valued at $38,000. He wants to convert it to a Roth. Would he have to convert the full $38,000 this year or could he do half this year and half next year?
Permalink Submitted by Alan - IRA critic on Fri, 2019-02-15 23:23
He can do any number of partial conversions he wishes, at anytime. Converting too much in a single year can push his marginal rate into a higher bracket, depending on where he already falls in the current bracket. But since recharacterizations are no longer permitted, he should determine how much the amount of the conversion he does will cost him in taxes. He should have other money available to pay those taxes, and should decline any withholding from the TIRA distribution.