My wife and I will have $0 income for 2025 tax year, filing jointly in CA, and I'll be the only one doing the conversion.
So standard deduction is $31,500 for 2025. And the federal rate is 10% for income $0-$23,850.
So does that mean if I convert exactly $31,500, then I owe no federal and state tax?
And if I were to, say, convert $55,350 (31,500+23,850), then I would owe $2385 federal (10% of $23,850) and about $239 state (1%)?
And apply the same formula for higher tax brackets. So I'm trying to figure out how much I'm willing to pay extra to convert more than $31,500.
Asides from corrections, any advice would be greatly appreciated! Thanks.
How to maximum traditional -> Roth IRA conversion with $0 income
byu/hobbes3k intax
Posted by hobbes3k
1 Comment
You’re correct about federal.
California has a smaller standard deduction, so you would owe state tax on most of the conversion.
As for whether you should convert more beyond the 10% bracket, the question is how high you expect your tax rate to be in retirement.
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`for 2024` << I assume this was a typo since you’re using 2025 numbers. To be clear: it’s far too late to do anything for 2024, and even though you can make a 2025 contribution through April 2026, a *conversion* counts for the year it actually happened.