These are ALL Great Questions.
1. Can I roll over my traditional IRA into a Roth IRA?
Yes. When you convert from a TRADITIONAL IRA to a ROTH IRA, taxes would be paid on any money
in the Traditional IRA that would have been taxed when you withdrew it.
2. If so, at what the tax rate will the conversion be taxed? (rephrased question)
It depends on your income tax bracket and income tax rate anywhere between 10% and 37%.
Please bear in mind that the money converted is added to your gross income for the tax year.
Federal income tax rates and brackets
3. Once my money is in a Roth IRA and have paid taxes on that money, will I be taxed again when I
decide to withdraw money again from the Roth IRA?
Roth IRA Distributions are NONTAXBLE (and penalty-free) if they are qualified. In some instances
you may need to pay taxes and penalties on earnings, such as:
- Being younger than 59 1⁄2, unless an exception applies (please see above) you may be subject
to taxes on gains at your ordinary income tax rate and a 10% penalty.
- If you are older than 59 1/2 years and haven't met the five-year holding requirement, your
earnings will be subject to taxes but not penalties.
4. I'm currently in the 22% tax bracket, what tax bracket would I fall under when I file my 2024 taxes
if I choose withdraw $80,000 ? TIAA will already be taking 10% out, so I would be taxed again at
tax time?
Please See answer to question 3.
5. If I max out my Roth IRA yearly, would I have to pay Capital Gains on money earned if I withdraw
in the future?
Please see answer to question 3.
6. If I max out my Roth IRA at $8,000 yearly, would I have to pay capital gains on money earned if I
withdraw?
Please see answer to question 3.
You may want to consult a Financial Planner or a Tax Professional about SPECIFIC
CASE SCENARIOS. In the mean time, let me help you out with a DIY (Do It Yourself)
approach:
Tax Calculator 2023
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