Personal Finance and Investing

nmmi

(248 posts)

18. You're welcome. And I am so relieved you are considering doing small conversion amounts at a time

Fri Nov 29, 2024, 01:15 PM

Nov 2024

I just added a bit to my post above on how Social Security benefits and Medicare (key word: IRMAA) might be taxed too.

The IRA RMDs are a small pain in the ass, as one has to figure out the amount each year (although Fidelity, for one, will figure it out for you and automatically do the withdrawals if you set it up that way. I just do it manually each year for my inherited IRA (which can't be converted to Roth) because I disagree with Fidelity's number -- a very complicated inherited IRA situation).

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Roth IRA conversion tax reporting. I am so confused! [View all] Susan Calvin Nov 2024 OP

"The question is not whether that makes financial sense." mahatmakanejeeves Nov 2024 #1

Thanks. Susan Calvin Nov 2024 #2

Capital gains is a non-issue with IRAs. One is taxed on the value of the IRA at the time of withdrawal or conversion nmmi Nov 2024 #15

Thank you. Susan Calvin Nov 2024 #16

You're welcome. And I am so relieved you are considering doing small conversion amounts at a time nmmi Nov 2024 #18

You are so nice to be relieved on my account. Thank you. Susan Calvin Nov 2024 #19

I do a small rollover like this every year Shermann Nov 2024 #3

Thanks. Susan Calvin Nov 2024 #4

Form 1040-ES Estimated Tax for Individuals mahatmakanejeeves Nov 2024 #5

Oh thank you! Susan Calvin Nov 2024 #6

You should get your November monthly statement from whoever runs your IRA in a few days. mahatmakanejeeves Nov 2024 #7

Oh great, one more thing to deal with. Susan Calvin Nov 2024 #8

She will have no capital gains to separate out kansasobama Nov 2024 #28

You don't have to wait to Jan 15. We pay the last estimated around the middle of December question everything Nov 2024 #14

I think yours is the best advice I have received, Susan Calvin Nov 2024 #12

I don't know your age. But I converted part of my IRA to a Roth at 64 one year before doc03 Nov 2024 #9

I hadn't thought about that. Susan Calvin Nov 2024 #10

Oh ouch. Susan Calvin Nov 2024 #11

Are both the traditional and Roth with the same custodian? No forms are needed question everything Nov 2024 #13

They are. It was only the estimated taxes I was concerned about. Susan Calvin Nov 2024 #17

Also, depending on the amount you may be subjected to Alternative Minimum tax. question everything Nov 2024 #20

Oh it's nowhere near enough for that. Susan Calvin Nov 2024 #21

You might consider NOT doing any Roth conversions -- nmmi Nov 2024 #22

Thank you for all the detailed advice. Susan Calvin Nov 2024 #23

Interesting - 20 years is my base case default assumption on longevity in my spreadsheet nmmi Nov 2024 #24

Oh I'm sure it's not too intuitive. Susan Calvin Nov 2024 #25

If you can, spread it out until 2032 kansasobama Nov 2024 #26

I'm not worried. I don't think I ever said or implied that I was. Susan Calvin Nov 2024 #31

Penalty is minimal even if you do not pay estimated taxes on time kansasobama Nov 2024 #37

Another sugestion when you convert from a IRA to the Roth if you have enough doc03 Nov 2024 #27

Good advice although kansasobama Nov 2024 #29

Absolutely. One advice that I keep reading consistently, is to never pay taxes from an IRA account, always pay the nmmi Nov 2024 #30

I'm glad I asked the question, as long as y'all didn't mind replying. Susan Calvin Nov 2024 #33

And then there is the NOT-simple matter about how much estimated tax to pay nmmi Nov 2024 #34

I don't think that's going to be a problem in my particular case, but Susan Calvin Nov 2024 #35

I use TurboTax to do my taxes and file online. Then when I get it right I print my tax return to have a permanent nmmi Nov 2024 #36

Yes, that was my plan. Susan Calvin Nov 2024 #32