JAS Financial Services, LLC
Joseph A Smith, CPA/ PFS, JD, AEPĀ®
Member
1603 Orrington Avenue
Suite 600
Evanston, IL 60201
847-328-8011
Fax 847-780-7920
joe@jasfinancialllc.com
https://jasfinancialllc.com/
 
 




Roth IRA Conversion Calculator
Roth IRA Conversion Calculator

When you convert a traditional IRA to a Roth IRA, the taxable portion of your traditional IRA (deductible contributions and earnings) is subject to federal income tax in the year of conversion.

This calculator compares two scenarios: Scenario 1--you convert a traditional IRA; and Scenario 2--you don't convert your traditional IRA. The calculator lets you choose whether to pay the conversion taxes from the IRA assets themselves, or from other assets. If you choose to pay income taxes from other assets, the calculator also determines the amount you could have earned on those funds had you not converted (this calculation is accomplished by modeling a separate "side fund").


The current year and the conversion year are assumed to be 2020.


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1The age 71 limit is solely for calculator purposes and does not reflect any legal limits or requirements (extending the age range beyond age 71 would require modeling required minimum distributions (RMDs)).

2If you have multiple IRAs, you must pro-rate your nontaxable balance among them. The IRS provides a worksheet in Publication 590-B.

3Applies only if you elect to pay conversion taxes from other (non-IRA) assets. This is the tax rate that you estimate will apply to the side fund that you would have if you don't convert your traditional IRA to a Roth IRA (and therefore don't have to use these funds to pay conversion taxes). This tax rate may differ from the tax rate that applies to your IRAs because, depending on the investments you choose, earnings on the side fund may be eligible for capital gains or other special tax treatment (for example, income from certain municipal bonds may be tax free), while IRA earnings are generally taxed upon distribution only at ordinary income tax rates.

4 Applies only if you elect to pay conversion taxes from IRA assets.



The foregoing is provided for information purposes only.  It is not intended or designed to provide legal, accounting, tax, investment or other professional advice.  Such advice requires consideration of individual circumstances.  Before any action is taken based upon this information, it is essential that competent, individual, professional advice be obtained.  JAS Financial Services, LLC is not responsible for any modifications made to this material, or for the accuracy of information provided by other sources. 

This communication is strictly intended for individuals residing in the state(s) of IL. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020.