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Level 2

Question

Recharacterization from IRA to Roth

6 replies
36 views

My wife is 72, and next year (2024) she need to start making withdraws from her IRA. Can she recharacterize $22,000 this year. What are the tax liability. Current we are in the 16% tax bracket.

Level 15

are you asking if you can do a Roth Conversion? if so, yes.

is the tax basis of her IRA zero?

How did you arrive at $22,000?

Where did you get your tax bracket from? the tax brackets are 10, 12%, 22%, 24% am 32% - there is no 16%.

Level 2

Thanks for the Quick response!

My wife did not donate to her IRA this past year. The $22,000 is the amount I would like to recharacterize. If I do more than that, my wife and I will be in a high Medicare bracket in 2025. Is there a ceiling on how much can be recharacterized in one year? The 16% is the amount I pay on my federal taxes last year.

Bill

Level 15

based on your second comment you already know the tax consequences. It is ordinary income.

It is a conversion you are looking to do, not a recharacterization.

There is no limit on the amount you can convert in one year.