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Posted by martin lynch on January 1, 2008, 11:14 am
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Hello. I'm 30 years old. Recently returned to grad school, so for
2007 my annual income will only be $8,400. Since I'm in the lower tax
bracket now, I thought it would be a good idea to convert my
Traditional IRA to a ROTH IRA since the tax penalty won't be as bad.
I have $18,000 in the IRA.
Do I understand this correctly, that $18,000 + $8,400 = $26,400 will
be what determines my tax bracket, which will determine the tax
penalty I pay for the ROTH conversion? Or will the $18,000 in the IRA
be taxed at a capital gains or some other rate?
Thanks
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