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 2023.
1The age 72 limit is solely for calculator purposes and does not reflect any legal limits or requirements (extending the
age range beyond age 72 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.
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Raymond James & Associates, Inc., member New York Stock Exchange/SIPC
This information, developed by an independent third party, has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Investments mentioned may not be suitable for all investors. The material is general in nature. Past performance may not be indicative of future results. Raymond James does not provide advice on tax, legal or mortgage issues. These matters should be discussed with the appropriate professional.
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