2024 Income Tax Brackets, Roth IRA Conversion
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- Опубліковано 6 вер 2024
- Show Notes: cardinalguide....
In today's episode of Cardinal Lessons, we are discussing the world of taxes. This video is a must-watch for anyone with traditional IRAs or 401(k)s, as we explore the concept of the IRS being your "silent partner" in these accounts. We're here to teach you how to minimize your tax obligations and efficiently manage your retirement savings. We will share invaluable insights on how to strategically "buy out" this silent partner, focusing on Roth conversions and the optimal use of tax brackets to ensure you pay the least amount of taxes over the lifespan of your money. Check out our video!
Questions? Email us at Hans@CardinalGuide.com, call us at (919) 535-8261, or visit our website at cardinalguide....
H E Scheil & Associates doing business as Cardinal Advisors holds an insurance license in all 50 states and DC. Listed below is the license # in each individual state. Alabama 675461, Alaska 100118081, Arizona 1800012348, Arkansas 100104794, California 0K32569, Colorado 464622, Connecticut 2463129, Delaware 1119857, DC 2887040, Florida L087124, Georgia 159539, Hawaii 445296, Idaho 507076, Illinois 100333675, Indiana 721739, Iowa. 1002056691, Kansas. 272705345, Kentucky 738674, Louisiana 614407, Maine AGN249408, Maryland 100048542, Massachusetts 2006645, Michigan 0104206, Minnesota 40411912, Mississippi 15016382, Missouri 8325733, Montana 100126008, Nebraska 100224332, Nevada 1007341, New Hampshire 2315847, New Jersey 1557889, New Mexico 1800010640, New York 1382342, North Carolina 1000092550, North Dakota 2000136230, Ohio 1028975, Oklahoma 100190853, Oregon 100237062, Pennsylvania 589318, Rhode Island 2309277, South Carolina 1907911784, South Dakota 10017719, Tennessee 2252224, Texas 1963111, Utah 513447, Vermont 1038574, Virginia 129027, Washington 864498, West Virginia 100107166, Wisconsin 100192273, Wyoming 275179 - Навчання та стиль
I always love your charts. They are so easy to follow.
@@joycewright5386 Thank you
Hans nice presentation as always! Love the old school whiteboard.
Great video guys. I just realized by looking at your tax brackets for 2024 that I can do another 100k + conversion for 2024 and still be in the 35% bracket. Thanks
Huge mistake, unless you are confident your future RMDs are going to push you up beyond the 37% bracket.
I’m amazed more Americans aren’t subbed. Love your content!
I retired early at 57. I'm doing Roth conversions, but doing it just within the 12% tax bracket. My retirement projections show me staying in the 12 or 15% tax bracket, so it doesn't seem wise to covert more and put myself into higher tax brackets just on conversions.
It depends on your brackets and amount in your TIRA when you have to take distributions at 7.5
It doesn’t make sense to do Roth conversions unless your RMDs (Age 73 or 75) along with your additional income (Social Security, Pensions, Interest, Dividends, etc.) is going to push you into a higher tax bracket than you would pay on your Roth conversions now.
Great vid! You should change from saying "7 Worries" to **7 Opportunities** ☺
Excellent video very easy to follow.
I think the chart should state "IRMAA starts at top of 22% bracket", correct? Love your videos!👍👍
It starts at $206,000 for 2024 $103,000 single
Great video Tom and Dad!!!
Thank you!
Yes , taxes are going up by law if nothing is done in 2026, the double whammy is that the standard deduction is going down too.. it will be interesting to see what if anything our inept Congress will do about any of it.
Lots of guessing in the planning part of this.. how long will you live, how long will one spouse outlive the other, what is the tax bracket of heirs that get the ira, what will happen to tax brackets, and you forgot to mention NII tax that RMD's may put you into also. Putting bonds in IRA and stock in taxable accounts so the IRA grows slower and the taxable account grows faster in the cap gains rate..
Yeah, I am trying to avoid IRMAA. I am just putting it off for a bit. I am a single. I only have three more years before I have to start pulling ss.
By the time you’re 65. The first IRMMA for single my be $150,000
@@Satjr35031 well I am actually 66, so I think it’s just a futile attempt.
nice job on this.
Thank you
My understanding is that there is also a waiting period (w/o penalty) of 5 years after the year of conversion (2024 conversion required you wait until 2029 to make a withdrawl with out penalty). I assume this would also include distributions from the conversion as well.
The 5 year conversion rule is only if you are younger than 59 1/2
If the market drops, that's when I plan to convert a portion of my IRA to a Roth. The problem is I have 1.2 million in my IRA, so even 100k conversion won't do much to keep me out of paying IRMAA. I am single and my 2024 income is around 100k counting my pension, social security and brokerage account.
Nice problem to have😊
It has nothing to do if market drops or not.
U should try to save the extra 3% tax that will come in 2026.
Plus what u convert now, growth tax deferred in Roth, e.g.another 20 yrs.
The bigger factor is "medicare bracket".
That is what is holding me back from converting the IRMAA. One year I converted about 100k and my Medicare went to about 600 a month. Sick over that. I had to pay a lot of federal tax that year over 30k.
@@mikeb6386 so u convert less.
But I think the point of the video is to be smart about it, e.g. at 62, 63, 64, it is a sweet spot.
Pay attention if u r at that age.
A second smart spot is if a spouse passes away because survivor will be single bracket the next yr.
@@mikeb6386That not how it works from the numbers you provided
Very useful information, could it be appealed in SSA-44 to deduct gambling losses from IRMAA as stated in Schedule A.
So using the income tax brackets in your examples, can you back out any qualified dividends (taxed at 15%) from the income to determine the amount of a Roth conversion you may want to make up to $191,950 (single)? For example, say a single filer has $200,000 in taxable income, but $40,000 of that income is from qualified dividends . . . the Roth conversion one should consider is $31,000, right? Does that make sense (given Roth conversions make sense in this scenario)?
Great information on this IRA to a Roth, I have just completed my 5th year of this conversion; the issue that I haven't heard covered is any current non-Roth IRA's is how is the current money is invested, I was 60%-40% stock market-bond (income) and I finally (this year) converted all my 401(k) to a moneymarket because any amount I converted to a Roth I made back in the stock market returns throughout that year, so I wasn't reducing my IRA...maybe I'm missing something but as I see it, it is difficult to reduce the IRA to a Roth without doing something like this?
So you are trying to avoid gains in your IRA to avoid taxes? That makes no sense at all. Even when you pay taxes you still get a majority of the money in your hand. Losing a dollar to taxes is better than losing a dollar to gains. If you really just hate paying taxes, donate your RMDs to charity instead, avoiding all taxes.
If a person is required to take a RMD because of his age and he has done that can he fill their bracket by doing a Roth conversion wth the amount to fill that bracket ?
Seems like once you start taking SS the game is over for you to see any benefit in your lifetime, you are doing it for heirs. Except if your heirs are in a lower bracket, very little benefit while you take the tax hit.
It still comes down to bracket and future bracket. E.g. if u r at the limit of 12%, 94k income including ss, u can convert 28 traditional to roth, i.e. the standard deduction amount, and remain in the same 12%.
Or u can jump to the limit of 22%, to let that grow 20 yrs more non tax in a Roth.
Or some balance, halfway into 22%.
Where did you get your IRMAA brackets from? rick7972 is correct and you need to correct it in your youtube video. Great info except of IRMAA brackets and if your on medicare it could be a BIG surprise.
In the show notes irahelp.com/wp-content/uploads/2024/01/2024-GRAY-Medicare20Planning20Chart-FINAL-12-5-23.pdf
I have a question. I am a teacher with a pension and social security. I retired Friday at 62. I am not getting Soc Sec yet but will next month. I have over 127K left in two 403b accounts. I am single and have thought about converting it to a Roth but I am not sure it would make that much difference for me. I have CDs well over $175K now and savings of $72K. Would you suggest combining the $127K 403b into an IRA or Roth conversion? I live in FL so only federal tax. Thanks.
Rodney. Not knowing the size of your pension and Social Security check? Most likely, you will not pay a lot of income tax. So Roth conversion, all at once, would cause your taxes to go way up. A possible alternative is purchasing an income annuity with the $127k that will pay a monthly income for life? Thank you for teaching kids all your life. I won’t charge you if you want some advice over the phone. Hans
@@CardinalAdvisors you are very kind Hans ❤
When you say that you might want to consider taking a higher conversion if your taxable accounts are higher, what is a "higher taxable account" man? I'm looking at a dollar amount.
He has a table. And mentioned the sweet spot of 24%. Maybe the next limit, too.
Those will go up 3% in 2026.
He mentioned medicare, u want to be in lower income then. Conversion counts as income.
Seems like once you start taking SS the game is over for you to see any benefit in your lifetime, you are doing it for heirs. Except if your heirs are in a lower bracket, very little benefit while you take the tax hit.