Maximizing IRA & Roth Advantages while avoiding extra taxes Hello
I want to run an idea past you before I maximize my contributions to my IRA.
I fall within the 10% tax bracket because I am military and my housing is covered by a non taxable stipend so i generally received a generous tax refund each year with through Combat pay, EITC and Child Tax Credit. I have $14000 in my IRA and wonder if I should convert a portion to a Roth IRA. I still want to receive the deduction that my traditional IRA gives me. If I contribute $5000 to my traditional IRA and convert $5000 to a Roth out of my existing traditional IRA funds will my non refundable savers credit cover the tax owed for the Roth conversion? How will this impact my state taxes? I do not pay any because of a non resident status in my home state.
Thanks |