Question

For nj state tax am i required to exclude part of my roth conversion tax if paying the whole tax will still keep my gross income under 100k and no tax would be required?

Forum|Forum|2 years ago
January 7, 2024
2 replies
0 views

for instance if i convert 20k and half is allowed to be excluded - can i forgo that, pay the tax on the whole 20k and thus increase the amount of tax ive now paid on all my iras

TurboTax Deluxe Online

fanfare

Employee

"am i required to exclude"

??

you are required to include.

if you make a large Conversion to Roth, you are at risk of losing some or all of your NJ Pension Exclusion amount.

The reduction starts at NJ taxable income $100,000 or more.

@lee0526487

fanfare

Employee

How can paying "more tax" reduce your taxable income?

It's not going to happen.

VolvoGirl

Employee

If you have more state tax withholding on the whole amount than you need it will go to cover the tax on any other IRA distributions or any other income you have. But remember only the amount after the tax withholding will be put into the ROTH. So you might want to add the tax back in from your own money to the ROTH account.