Taxpayers face stealth taxes and penalties from Roth conversions
Updated
Updated · MarketWatch · May 8
Taxpayers face stealth taxes and penalties from Roth conversions
10 articles · Updated · MarketWatch · May 8
For Medicare recipients, exceeding an IRMAA threshold by $1 can lift Part B premiums to about $592 a month per person at roughly $400,000 MAGI.
Conversions can also trigger a 3.8% net investment income surtax, make up to 85% of Social Security benefits taxable, and wipe out ACA subsidies or deductions.
The report says rules under last year's OBBBA make timing critical, with required minimum distributions, pro-rata taxation and five-year withdrawal clocks raising the risk of costly mistakes.
Are hidden 'stealth taxes' making your Roth conversion a costly financial trap?
The 2025 tax act changed everything. Is your retirement savings plan now obsolete?