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Level 2
posted Sep 12, 2022 12:49:25 PM

How will a Roth Conversion from a Trad IRA affect 2022 AGI? (tax liability to be paid from a taxable brokerage account)

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1 Best answer
Level 15
Sep 12, 2022 1:30:29 PM

The amounts from your conversion as well as any gain from selling brokerage assets will be added to your AGI. You will pay income tax at your marginal tax rate on the conversion. Additional tax may be assessed if you sell brokerage assets at a capital gain—generally 15% but depends on your taxable income. 

4 Replies
Level 15
Sep 12, 2022 1:30:29 PM

The amounts from your conversion as well as any gain from selling brokerage assets will be added to your AGI. You will pay income tax at your marginal tax rate on the conversion. Additional tax may be assessed if you sell brokerage assets at a capital gain—generally 15% but depends on your taxable income. 

Level 2
Sep 13, 2022 5:44:57 PM

Thanks.

How then will a Roth Conversion in an amount equal to the Standard deduction (or Itemized Deductions) affect the tax resulting from the amount converted?

Level 15
Sep 13, 2022 5:48:37 PM

Then you will owe tax on all your other income.   The Standard Deduction (or Itemized Deductions) is subtracted from your total income to give you the taxable income.  

Level 2
Sep 14, 2022 4:53:28 PM

Amount Converted would be considered an IRA Distribution (Other Income in TT Tax caster)?