Yes, it is possible that your tax liability on converting from a IRA to an Roth would be lower. Lets look at it step by step.
Taxable event: Converting funds from a IRA to a Roth is taxable in that funds that were previously income tax deferred are now subject to income tax. So the converted funds would be reported as income on the Form 1040.
Standard Deduction: After all income is calculated on Form 1040, also know as Adjusted Gross Income, one can itemize their deduction or take the standard deduction. The 2025 standard deduction is:
- Single or Married Filing Separately: $15,750
- Married Filing Jointly: $31,500
- Head of Household: $23,625
Taxable Income: Total Income reduced by the Standard Deduction brings us to the Taxable Income at which time the income tax will be calculated based upon your filing status: single, married filing joint, married filing separate, head of household, qualifying surviving spouse.
I hope this helps.
