dmertz
Level 15

Retirement tax questions

If you do the Roth conversion in the same year for which you make the traditional IRA contribution and you have no other money in traditional IRAs, it doesn't matter whether the IRA deduction or not.  If deductible, the Roth conversion is taxable, offsetting the deduction.  If nondeductible the Roth conversion is nontaxable.

 

Only if the IRA contribution is made for some year before the year in which the Roth conversion tax place will there be any difference if you make the contribution deductible.  For example, if you make a deductible contribution for 2023 and do the Roth conversion in 2024, you effectively move taxable income from 2023 to 2024.  (Of course you don't want to make a deductible contribution if you don't have enough taxable income to offset, but in most cases if your taxable income was already low you would probably be eligible to contribute directly to the Roth IRA.)