Author Topic: Tax gain harvest or Roth conversion with fed/state taxes to consider?  (Read 356 times)

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!

gocurrycracker

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Re: Tax gain harvest or Roth conversion with fed/state taxes to consider?
« Reply #1 on: November 12, 2020, 06:27:28 PM »
Should I do a roth 401k conversion or tax gain harvest at this point?
If you do a Roth conversion you will pay some tax now, probably 12% federal and 6.x% state (~18% total?)

If that is less than or equal to what you will pay in retirement, then a Roth conversion helps. If it is higher, than it doesn't.

You can compare similar numbers for realizing a capital gain... maybe 0% federal 6% state now vs 0% federal 6% state later.


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

Sorry, I'm not sure what you are asking