turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

Can I use the Inflation Reduction Act solar residential tax credits (30%) to pay for taxes resulting from moving funds from my traditional IRA to my Roth IRA?

I am retired and have no earned income and without doing a Roth conversion I will have no tax liability in 2022. I also have made estimated tax payments this year to pay the Roth conversion taxes.
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

3 Replies

Can I use the Inflation Reduction Act solar residential tax credits (30%) to pay for taxes resulting from moving funds from my traditional IRA to my Roth IRA?

yes -  

 

look at Form 1040

https://www.irs.gov/pub/irs-pdf/f1040.pdf

 

your tax will be presented on Line 16.

the solar credit will be presented on Line 20

Line 20 is subtracted from Line 16, but can not go below zero.  

 

if Line 20 (the solar credit) is greater than Line 16 (the tax), that difference can be carried foward to the following year. 

Can I use the Inflation Reduction Act solar residential tax credits (30%) to pay for taxes resulting from moving funds from my traditional IRA to my Roth IRA?

If you have no other taxable income, doing a Roth conversion to create taxable income and an income tax bill is a good way to benefit from the solar credit.  Remember, however, that doing a Roth conversion will also make up to 85% of your social security benefit taxable (if you are taking your SS benefit).  So it's a more complicated calculation to figure out how much you can convert.  

Can I use the Inflation Reduction Act solar residential tax credits (30%) to pay for taxes resulting from moving funds from my traditional IRA to my Roth IRA?

Yes I am aware of having to pay taxes on more of my Social Security income. It will take me 4 to 5 years to use all of the tax credit to minimize paying taxes on more of my Social Security income.

Unlock tailored help options in your account.

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question