Quote:
Originally Posted by SaucyJim
In a similar "calculator" mode for a Roth conversion right now. I have ZERO W2 income and am married. Neither of us on social security. Here are my thoughts for a 100% tax-free IRA -> Roth conversion:
Max out HSA with single contribution: $9550 (family w/$1000 catch-up)
Take standard deduction for my spouse and myself: $30,000
So, I can "safely" move $39,550 at ZERO tax, right?
That leaves me with:
* 10% tax bracket on next $23,850 of rollover ($2385 tax)
* 12% tax bracket on next $73,100 of rollover ($8772 tax)
Combined, you get an $11,157 tax on $96,950 -- overall, an 11.5% tax rate to convert all those IRA funds for tax-free income of the funds, which are all positioned in income-producing positions.
So, if you add in the $39,500 tax-free conversion, we're going to convert a total of $136,450 IRA to Roth with only $11,157 in taxes. If my calculations are correct, that's, ultimately, a 8.18% tax on the total conversion. Right?
Please chime in if I have something wrong here. I've run this past my tax guy, but my confidence in him has waned in recent years, as he's further down the aging path than I at this point.
Go!!
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Looks basically good, and any error in too much IRA conversion wouldn't be tax catastrophic. .
Not totally clear, you are saying that you have zero income for 2025? no 1099, no interest and dividend income, no capital gains income and you can live in the villages paying 50K a year in living and food expenses?
What source of funds are you using to pay expenses that is not taxable? and you must have some funds earning taxable income?