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Topics - Ineedcoffee123

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Hi Jeremy,

It looks like we will have $39,800 of the $104,800 bucket since I'm projecting we'll make $65,000 (MFJ) this year roughly. I've never had a year like this and would like to take advantage of this since in the years past, never knew as much as we do now (thanks to your site!) Should I do a roth 401k conversion or tax gain harvest at this point? My brokerage account is less than $10k but we are in NY so also have to pay state taxes. We will have access to a 457b with retirement hopefully in 5 years or so but because of the pension in retirement, I already see we will be bumped into the 12% federal bracket on top of the state taxes. 

Also, the federal estimated taxes are roughly $429 so does it even make sense to do a tax loss harvest?

Congrats on the latest addition!

Taxes / Calculating roth conversion space with feie and state taxes?
« on: November 06, 2019, 04:00:38 PM »
We will be claiming the standard deduction this year married filing joint for $24, 400 and have deductions for 401k pretax contributions for $38,000 so we have space of $62,400 roughly tax free. I estimate our taxable income between earned and unearned income this year being roughly $32,000. Does this mean we can do a roth conversion up to $30,400 and stay in the 12% marginal tax bracket? Since I was abroad working my income will be excluded under the bona fide resident test so this calculation is based on my husband's income.

1. Am I understanding the tax free space correctly?
2. Does my income excluded under FEIE get factored back in for federal and state taxes then excluded? I want to avoid losing any credits we were eligible for that I was not aware of. Last year, we lost the child tax credit because I didn't realize our income should have been split between pretax and roth 401k contributions to get more taxable income.
3. Is the tax we would pay on the conversion be based on the converted amount only i.e. $3648? I will be paying this from our savings.
4. How can I calculate how this roth conversion  amount will affect our NY state taxes? I am worried what impact this roth conversion with the FEIE will affect our state taxes since we still claim part year residence in NY due to my husband's job.

Thanks for your help!

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