Compare the tax timing
A traditional IRA contribution may be deductible; eligibility for a deduction depends on income, filing status, and workplace retirement coverage. Roth IRA contributions are not deductible, but qualified withdrawals are tax-free.
Check eligibility first
Contribution limits change by year. Income can restrict direct Roth contributions and traditional IRA deductions. Making a nondeductible contribution is different from receiving a deduction; keep the required basis records.
Review conversions separately
Moving pretax IRA money to a Roth IRA can create taxable income in the conversion year. Existing after-tax basis and other IRA balances can affect that calculation. Evaluate the tax bill and how it will be paid before requesting a conversion.
A practical example
A saver expecting a low-income year may want to compare a partial Roth conversion with waiting. The decision should include other income and available cash, rather than converting the full account automatically.
What to gather
- Current IRA balances and account types
- Workplace retirement coverage and income estimate
- Prior Forms 8606 for nondeductible contributions
- Contribution and conversion confirmations
Official references
General educational information, not individualized tax, legal, or investment advice. Federal rules are summarized; state rules and your circumstances may differ. Check the rules for your tax year before acting.