I want to do a Roth conversion from my traditional IRA in the amount of $250,000. It's my understanding that I have to pay the income tax on the $250,000. Can that tax be paid from the funds in the IRA or do I have to pay the tax outside of the IRA?
– Kevin
This one is straightforward. The IRS doesn't care where the money comes from. As long as you cut them a check they'll be happy!
All kidding aside – yes, the $250,000 is included in your gross income. You can pay the tax bill using either the converted funds or money from other sources, but the difference is potentially substantial. You may want to consider using non-IRA funds to pay the tax bill if it's an option for you.
A financial advisor can help you make important retirement planning decisions, like when to do a Roth conversion and in what amount. Connect with a financial advisor.
#funds #want #conversion #bill
– Kevin
This one is straightforward. The IRS doesn't care where the money comes from. As long as you cut them a check they'll be happy!
All kidding aside – yes, the $250,000 is included in your gross income. You can pay the tax bill using either the converted funds or money from other sources, but the difference is potentially substantial. You may want to consider using non-IRA funds to pay the tax bill if it's an option for you.
A financial advisor can help you make important retirement planning decisions, like when to do a Roth conversion and in what amount. Connect with a financial advisor.
#funds #want #conversion #bill
6 days ago
