Well, if you convert that TSA plan to a Roth, you will recognize taxable income for the full amount. And then when you withraw from it later, you will not be taxed at that time.
Generally speaking, if you think your FUTURE income will be less than your CURRENT income, you will want to do that conversion in the future...when your tax rate is lower from reduced income.
But there might be other reasons, other than tax, that you might want to convert now. E.G. if you feel you are a genius at stock picking and you want to invest now and then sell later for a huge gain, then you could pay the tax now, convert to ROTH, make your brilliant investment, take the gain (tax free) and pull out the funds (tax free).
But, that's easy in theory...but the hard part is getting that monster stock gain!
I hope this helps you.
Kelly C, CPA
P.S. Of course, I am not recommending you do that with stock investment with your retirement...that was an example of how and when it might make sense.
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