Where Are the Roth Conversions?
If you add Roth conversions to the plan in Income InSight and discover that conversions are not taking place it may be because:
- The Effective Marginal Rate is higher than the elected option. If you elect Roth conversions to the 12% Effective Marginal Rate and the rate for that year is already at or more than 12%, there will be no conversions. The same concept applies if you elect conversions to the 10%, 12%, 22% or Lifetime Effective Rate.
- There is not a source of non-qualified money to pay the taxes associated with the conversions.
In this example, there was not a surplus of non-qualified income to cover the taxes on a conversion until after seven years.