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Thread: Questions about Tax Implications on Roth IRA Conversion

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    Default Questions about Tax Implications on Roth IRA Conversion

    Hi! I have questions about tax implications on Roth IRA Conversion. Let's assume I have about $300K in my TSP account, and I want to transfer the amount to my Roth IRA at the age of 60 years old. Let's assume my income for the year that I make the transfer is about $24K. Let's further assume the current tax brackets would remain the same . Would you say I'd pay this much of taxes on the transfer?
    •chances are my taxable income would be ($24K+$300K)= $324K
    •then I'd be in the 35% tax bracket
    •then my tax liability would be $324K*.35 = $113,400
    •plus state income tax on the amount $324K?
    Thank you.

    Rate For Single Individuals For Married Individuals Filing Joint Returns For Heads of Households
    10% Up to $9,950 Up to $19,900 Up to $14,200
    12% $9,951 to $40,525 $19,901 to $81,050 $14,201 to $54,200
    22% $40,526 to $86,375 $81,051 to $172,750 $54,201 to $86,350
    24% $86,376 to $164,925 $172,751 to $329,850 $86,351 to $164,900
    32% $164,926 to $209,425 $329,851 to $418,850 $164,901 to $209,400
    35% $209,426 to $523,600 $418,851 to $628,300 $209,401 to $523,600
    37% Over $523,600 Over $628,300 Over $523,600


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  3. #2

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    Default Re: Questions about Tax Implications on Roth IRA Conversion

    Looks right depending on tax rates. Ever consider the conversion over over the course of 5-6 years?

    This calculator may help, but you'll have to lie about the ages since it requires a five year difference between age and retirement age.

    https://www.tiaa.org/public/calcs/rothiracalculator

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