You mention that your wife makes $50k & your traditional IRA is $20k, so if you convert the $20k traditional IRA into your Roth IRA, that will bring your gross income up to $70k, also known as adjusted gross income (AGI). There are some differences between adjusted gross income & modified adjusted gross income, but I’m trying to keep things simple.
The standard deduction for married filing jointly (MFJ) for 2024 is $29.2k so that would bring your taxable income down to $40.8k.
The 12% Federal tax bracket for 2024 is $23.2k-$94.3k for MFJ, so even with the Roth IRA conversion, you will be on the middle of the 12% Federal tax bracket for MFJ.
Once you get out of school & get a job, you want to put as much into your Roth IRA & open a Roth IRA for your wife. You want as many years as you can get for that Roth IRA to compound tax free & can be taken out state & Federal tax free after age 59.5!
bill
The standard deduction for married filing jointly (MFJ) for 2024 is $29.2k so that would bring your taxable income down to $40.8k.
The 12% Federal tax bracket for 2024 is $23.2k-$94.3k for MFJ, so even with the Roth IRA conversion, you will be on the middle of the 12% Federal tax bracket for MFJ.
Once you get out of school & get a job, you want to put as much into your Roth IRA & open a Roth IRA for your wife. You want as many years as you can get for that Roth IRA to compound tax free & can be taken out state & Federal tax free after age 59.5!
bill
Statistics: Posted by billfromct — Mon Mar 18, 2024 12:17 am