Personal Investments • Roth conversion confusion

Your IRA is not very large, so depending on future income streams, your age, what you hold in your IRA, etc., you may not have an urgent need to do Roth Conversions. Long Term Capital Gains harvesting might be just as good or even better.

Filling the 12% bracket is a bit too far, at most you would convert to the start of the LTCG tax phase-in. Even if you are not selling assets, you may have qualified dividends, you want those to remain untaxed. If you convert more and push your AGI above the start of the LTCG phase-in, your marginal rate on Roth Conversions is 12% ordinary taxes + 15% as each converted $ above the LTCG phase-in also pushes a $ of qualified dividends/LTCGs into being taxed, so you get a 27% marginal rate.

If you need ACA, then you should be looking at controlling your income based on the Federal Poverty Levels. MAGI above 2 x FPL reduces ACA premium credits at various rates, but by the time you are at 2.5x FPL, it is 14-18.25% on top of your ordinary tax rate.

Thank you, I have been wondering about this.
The impending international move is what has me leaning towards the roth conversion
But if I went the LTCG route that would mean
47025 - qualified dividends = gain harvesting amount?
I feel the more I read about these things the more I am confusing myself, hence the questions here

Thank you all, appreciate your input

Max MAGI before LTCG taxes kick in for singles=
47025 start of LTCG bracket phase-in + 14600 std deduction + 1950 additional std deduction if 65 or over

Statistics: Posted by RyeBourbon — Sat Aug 17, 2024 1:28 pm — Replies 12 — Views 1157