CFS Advisor Team

26 W Dry Creek Cir, Suite 250
Littleton, CO 80120
303-470-5534
cfs@cfsadvisorteam.com
www.cfsadvisorteam.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 in 2018; and Scenario 2--you don't convert your traditional IRA at all. 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").


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1The age 70 limit is solely for calculator purposes and does not reflect any legal limits or requirements (extending the age range beyond age 70 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.



IMPORTANT DISCLOSURES

CFS Advisor Team is a marketing name.for securities, insurance and investment advisory services offered by William Wilson through SagePoint Financial, Inc., Member FINRA/SIPC and a registered investment adviser. Neither SagePoint Financial nor its representatives or employees provide legal or tax advice. If legal or tax advice or other expert assistance is required, the service of a currently practicing professional should be sought. 

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual's personal circumstances.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

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This communication is strictly intended for individuals residing in the state(s) of AL, AZ, AR, CA, CO, FL, ID, IL, IN, IA, MD, MA, MI, MN, MS, MO, MT, NV, NM, OH, OK, OR, SC, SD, TX, UT, VA, WA, WI and WY. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2018.