I had a large old 401K that I rolled over into a traditional IRA. It was around 100K about 4 months ago and is now around 110K.
I want to convert this into a ROTH IRA.
As I am math challenged and not the sharpest knife in the drawer I am having trouble figuring out what my federal and state taxes would be on this conversion. I live in California and my spouse and I file taxes jointly.
We make around $150K together before any taxes. So our CA tax bracket for 2018 is 9.3% and federal income tax bracket for 2019 is 22%.
The 110K conversion would move us up from a total income of $150K to a total income of $260K. This appears to be the 24% federal income tax bracket and the same state income tax bracket.
So here's the (obvious) question (don't laugh !!) :
Does this mean we would continue to owe 9.3% in state income taxes on this conversion and about 24% federal income tax on the 260K ? This is around $62400 (of which we would have already paid $33000 through each paycheck) leaving us owing old Uncle Sam around $29400 ? And $10230 for Aunt California ?
Is this accurate math ?
This is a lot of taxes ! Help ?!
I want to convert this into a ROTH IRA.
As I am math challenged and not the sharpest knife in the drawer I am having trouble figuring out what my federal and state taxes would be on this conversion. I live in California and my spouse and I file taxes jointly.
We make around $150K together before any taxes. So our CA tax bracket for 2018 is 9.3% and federal income tax bracket for 2019 is 22%.
The 110K conversion would move us up from a total income of $150K to a total income of $260K. This appears to be the 24% federal income tax bracket and the same state income tax bracket.
So here's the (obvious) question (don't laugh !!) :
Does this mean we would continue to owe 9.3% in state income taxes on this conversion and about 24% federal income tax on the 260K ? This is around $62400 (of which we would have already paid $33000 through each paycheck) leaving us owing old Uncle Sam around $29400 ? And $10230 for Aunt California ?
Is this accurate math ?
This is a lot of taxes ! Help ?!
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