Personal Finance (Not Investing) • Roth conversion tax source

Your logic is flawed. After you did your conversion in December, you were free to write a check for $12,000 to your Roth. It's ten minutes of work for potentially thousands of dollars in future tax savings.

Please explain. How do you get to write a $12K check to your Roth? Money from where?

$12K was already added during the second conversion of the year. Thx

You convert $24,000 to Roth. You have $12,000 withheld for taxes. You write a check from your taxable brokerage/checking account to your Roth for the amount withheld. In the end you have converted the entire $24,000, but your tax payment is now timely as it was withheld instead of paid as estimated taxes.

HA! I didn’t know this. This will be useful if/when we do any more conversions.

Nor did I. Is the paperwork associated with a direct rollover complicated? So the IRS allows a Roth indirect roolover> so I get to have my cake and eat it too? I'm not working, so no earned income, with a MAGI of 209k. I can do my January conversion of 105, and my conversion in december of 24k, with 12.5k withholding, and the IRS lets me take 12.5k from my taxable account and put it into the Roth? sounds too good to be true, but I'm game, if it's legal.

Statistics: Posted by capran — Thu Jun 13, 2024 10:03 pm — Replies 40 — Views 2177

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