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Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 2688
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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I am trying to decide should I convert part of my

Customer Question

I am trying to decide should I convert part of my traditional IRA to a Roth. I retired in January of this year and rolled over my 401k to my Vanguard Traditional IRA. Currently am 63, receive military retirement, and I have no loans. House and car paid. My Traditional is about 685,000 and Roth 83,000. I can live on my retirement. I have one child. Don't know what to do.
JA: The Accountant will know how to help. Is there anything else important you think the Accountant should know?
Customer: I have bank and saving accounts and an annuity that I have not not withdrawn from. My tax bracket was 28%.
Submitted: 1 month ago.
Category: Tax
Expert:  Barbara replied 1 month ago.

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

The biggest negative to any Roth conversion is that the full amount of the transfer is considered ordinary income. As a result, you'll pay taxes immediately on the entire balance of your IRA. Since you have a sizable IRA, this can prove to be a substantial tax hit. A large Roth conversion may even bump you up to a higher tax bracket, costing you even more.

The following links contain additional information you will find helpful:

Please let me know if I can assist you further.

Thank you and best regards,