Tax Planning for 2018 to 2025

On December 31^st, 2025 Federal taxes are scheduled to go back to the 2017 rates.  While there is a chance of locking them in lower for longer, given our national debt problem, there is a good chance they will revert. 

As a result some tax experts are saying that annual Roth IRA conversions make more sense now than ever.  Others believe that any conversions you can do and still stay in the 24% or less bracket will do no harm.  Plus in the future, those dollars can grow 100% tax-free, and you don’t have required minimum distributions after 70 ½.

For example, couples can go all the way up to $315,000 in income this year and still be in the 24% Federal tax bracket. 

However, beginning in 2026, they will likely be at the 25% rate making just $153,100.  (see below)

Please let me know if you would like to brainstorm; we could also check with your CPA to see what they think. 

I believe that for many people today, an annual Roth IRA conversion might be beneficial for their families future after-tax net worth!

Check with your CPA of course, before doing anything, and be sure to know all of the tax ramifications.  There will be additional taxes due if you convert funds to a Roth IRA, so be sure to account for that in your planning and have it set aside in something safe to protect against market volatility.

(image source Bob Keebler)

Thanks for taking a look!

 Tom Gartner, MSAPM, CFP®

This article represents opinions of the authors and not those of their firm and are subject to change from time to time, and do not constitute a recommendation to purchase and sale any security nor to engage in any particular investment or legal strategy. The information contained here has been obtained from sources believed to be reliable but cannot be guaranteed for accuracy.