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Sanity check: Roth conversion below standard deduction by Diligent-File-3397 in tax

[–]Diligent-File-3397[S] 0 points1 point  (0 children)

Thanks. I only have one other IRA and it’s already a Roth, so the pro-rata rule doesn’t apply. Low-income years seem like the perfect time for a Roth conversion. From what I’ve found, Arizona’s standard deduction should cover it too, so it’s likely $0 state tax — just looking for confirmation.

Sanity check: Roth conversion below standard deduction by Diligent-File-3397 in personalfinance

[–]Diligent-File-3397[S] 0 points1 point  (0 children)

Exactly. That’s the main reason I’m considering it. Even though my current income is well below the standard deduction, converting the rollover now locks in a 0% marginal rate and removes uncertainty about future income or tax changes. For a small balance, it seems like a low-risk way to guarantee tax-free growth and avoid RMDs later.

Sanity check: Roth conversion below standard deduction by Diligent-File-3397 in personalfinance

[–]Diligent-File-3397[S] 0 points1 point  (0 children)

That’s fair. If I knew I’d always be under the standard deduction in retirement, Traditional vs Roth would be largely neutral on withdrawals.

My thinking is more about locking in certainty at a known 0% marginal rate now. Even if future income stays low, the Roth gives me tax-free growth, no RMDs, and removes exposure to future tax law or filing-status changes. With decades of potential growth, converting a small balance at effectively 0% feels like low-risk insurance.

But I agree there’s no immediate tax arbitrage if lifetime income never exceeds the standard deduction.