Is a Roth conversion (from rollover IRA to Roth) covered by the standard deduction?
I received no job income this year. I found many online posts saying I could take advantage of this by doing a Roth conversion and if the conversion amount was less than the standard deduction it would be essentially free. So I did this. Turbotax read in all my Vanguard documents, ran the numbers, and showed that I owed no tax.
The IRS sent me a collection for $1000 or so, it looks to be about 10% of the conversion amount. I called them and their representative said this is because Roth conversions are not subject to the standard deduction and so I immediately pay taxes on the conversion amount.
I searched online here and found just one old post related to this, which seems to indicate the IRS is wrong in this case.
So is the IRS wrong and I should challenge this? Or are they right and my standard deduction doesn't apply to the Roth conversion.
Edit:
* Age: late 40s.
* This was for tax year 2019
