How To Minimize Your Taxes in the Roth IRA Conversion Strategy

You are receiving this email because you signed up to receive Bob Carlson's free e-letter Retirement Watch Weekly, or you purchased a product or service from its publisher, Eagle Financial Publications. [Carlson's Retirement Watch Weekly] [Retirement Reports](www.retirementwatch.com/retirement-resources/) [Retirement Articles](www.retirementwatch.com/retirement-articles/) Brought to you by Eagle Financial Publications How To Minimize Your Taxes in the Roth IRA Conversion Strategy by Bob Carlson Editor, [Retirement Watch]( 11/05/2023 SPONSORED [Missed the Meteoric Rise of NVIDIA? Do This…]( [image]( You've heard the buzz about ChatGPT and Nvidia, right? A.I. activity is off the charts…since last October, the price of Nvidia is up over 250%. What makes A.I. different - so much bigger than anything that's come before it - is the sheer power of the technology itself. And now, legendary quant experts Andy and Landon Swan say we're on the verge of a MONSTER breakout in A.I. It's a tiny sub$5 stock they believe could become the No. 1 A.I.-powered stock of the decade. I strongly urge you to take a few minutes to view this special presentation [HERE.]( [CLICK HERE...]( Fellow Investor, [Bob Carlson]Here’s the follow-up (how to convert your traditional IRA to a Roth with minimal tax burden) to last week's Retirement Watch Weekly. Next Step: Reduce your adjusted gross income (AGI). You'll find AGI on the first page of Form 1040, on line 11. The deductions you can take from gross income to arrive at AGI are on Schedule 1 of Form 1040. All the deductions are too numerous to list here, but they include retirement plan contributions for the self-employed, health savings account contributions, medical insurance premiums for the self-employed, and one-half of self-employment taxes. Review the form to see if you can take or increase any of the deductions. Next Step: Increase your charitable contributions. When you’re charitably inclined, increasing contributions for the year can reduce taxable income (when you itemize expenses) and reduce the cost of doing an IRA conversion. You can bunch several years of charitable contributions in one year by taking the money from savings. Contributing to a donor-advised fund is a popular way to do this. Or you can donate an appreciated investment, such as shares of a stock or mutual fund. This doesn’t require any cash and allows you to deduct the fair market value of the shares without having to pay capital gains taxes on the appreciation that occurred while you owned the property. Next Step: Pay the conversion taxes from non-IRA funds. When you take cash out of the IRA to pay taxes on the conversion, you also include that amount in gross income and pay taxes on it. So, you’re sort of paying taxes on the taxes. A conversion costs less when the conversion taxes are paid using cash from other accounts on which you already paid taxes. That also ensures the entire amount taken from the traditional IRA is rolled to the Roth IRA. You receive a bigger payoff from the conversion by having more tax-free income in the future. [Are You or Your Children Dangerously Underinsured?]( [image]( While no one likes to think about dying and the consequences, we must remember that our family and business future is at stake if we are not adequately insured. Considering that premiums for Term Life Insurance are at an all-time low, and with our new “easy to apply” website, there is absolutely no reason to be underinsured and unnecessarily financially expose those you love. With one click, if you are healthy and under age 65, you can get a Term life insurance policy up to $2 million, potentially without a medical exam. With one click, you can have an agent-free experience, where you can log in to our user-friendly website, quote yourself, apply, and put your policy in force in less than 15 minutes. So, what are you waiting for? [Go ahead and click here now.]( [CLICK HERE...]( Next Step: Continue to monitor and evaluate your situation. You might determine early in the year that a conversion doesn’t make sense. But circumstances can change during the year. Some people retire or are laid off during the year, causing a substantial drop in gross income. That might be a good opportunity to convert IRA assets or increase the amount you were planning to convert. Or deductions might increase. Perhaps you incurred a large amount of deductible medical expenses. Or you decide to make a large charitable contribution that wasn’t planned earlier in the year. Changes in investment prices also can be a good time to review your decision. Suppose you planned to do a conversion at some point during the year. The markets, or one of your investments, suddenly enters a correction or bear market. Convert the assets before the price recovers and you’ll turn more future ordinary income into tax-free income at the same tax cost. Or suppose you weren’t planning to do a conversion this year. A significant market drop could improve the benefits of doing a conversion, because you’ll be able to convert more assets at the same tax cost. When you expect the prices to recover at some point, this is an opportunity to turn ordinary income into tax-free income at a reduced cost. You don’t have to convert the same assets. You can sell the assets in the traditional IRA and convert the cash. After the cash is in the Roth IRA, it can be invested in other assets you believe are more likely to appreciate than the investment you sold. I'll cover more on this still-developing topic in upcoming issues of Retirement Watch Weekly. To a better retirement, [Bob Carlson] Bob Carlson Editor, Retirement Watch Weekly Editor’s Note: Congress is spurring on the most dangerous retirement threat of the last 50 years. I’ll reveal the deadly truth behind this government move. Plus the ONLY way to fully protect your wealth in the coming months. [Click Here for the Full Story.]( SPONSORED [Trade Smarter: Discover Hidden Opportunities w/ A.I.]( [image]( The world’s leading artificial intelligence is forecasting trends in the market in our Free Live A.I. Training. [Save your seat to watch live >>]( [CLICK HERE...]( Want More Retirement Advice? Check out my website, [RetirementWatch.com](, where you’ll find hundreds of free articles covering every aspect of retirement planning. Popular Posts: [The Overlooked Retirement Time Bomb]( [Understanding Rules of IRA Contributions]( [Strategies to Reduce Alternate Minimum Tax]( [Avoiding Expensive IRA Mistakes]( New to the Retirement Watch Community: SeniorResource.com Medicare is a federal health insurance program that primarily serves people aged 65 or older. However, it also provides benefits to younger folks with certain disabilities and people with End-Stage Renal Disease. 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