<#-- Rebranding: Header Logo--> <#-- Rebranding: Footer Logo-->

Is there a written formula to manually calculate how much a person can convert from an IRA to an established Roth in 2019 while staying in the current 12 percent tax bracket?

Is there a written formula to manually calculate how much a person can convert from an IRA to an established Roth in 2019 while staying in the current 12 percent tax bracket? I am a single person on Social Security.

Social Security, IRAs, Taxes
Answers
Sort By:
Most Helpful
4 days ago

For the 2019 tax year, the 12% tax bracket for a single taxpayer ends at $39,475 and the standard deduction is $12,200. So, making some simplifying assumptions, you'll need to keep your taxable income, including your Roth conversion, below $51,675 ($39,475 + $12,200). 

Keep in mind your Social Security is at most partially taxed. Also, there are tax preferences on long-term capital gains and qualified dividend income, which mean you might only be in a 15% marginal tax bracket when your taxable income somewhat exceeds $51,675.

Below is a link to a free online tax estimator that I recommend to better model the effect of Roth conversions on your marginal tax bracket.

https://www.olt.com/main/home/taxestimator.asp 

 

 

April 2019
April 2019
April 2019