Roth conversion
By Jude Wallis
A Roth conversion takes pre-tax retirement money, adds it to a Roth account, and includes the converted amount in taxable income for that year.
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The tax is the converted dollars times the stacked rate those extra dollars meet. Paying the tax from outside the account keeps the converted balance intact so it can compound inside the Roth wrapper.
Which path is cheaper depends on the rate now, the rate later, and whether the tax is paid from outside.
How a Roth conversion works is the explainer. The Roth conversion tax calculator is the current-tax identity. Tax-deferred is the wrapper being left.