I'm not sure I'm grasping everything about the above options. What is the best option for retirement contribution & minimizing taxes in my situation described below:
Married and we file jointly
Projected 2017 gross income will be 175 K (but could potentially be > 186K depending on whether spouse gets a job-thereby making us get phased out of ROTH)
Projected 2018 gross income will be 80-95K (going back for more training x 3 years)
For the year 2017, if I have $5500 spare income to contribute to a retirement account, which option is the best? If I create a regular IRA and contribute $5500 in December 2017 and plan on converting to ROTH IRA within 60 days in Jan/February 2018 (to avoid penalty beyond regular income tax), what will my tax rate be? Will it be based on 2017 income or 2018 income which is significantly lower and puts us in a lower bracket?
Its quite possible I have understood it all wrong. Please help.
Married and we file jointly
Projected 2017 gross income will be 175 K (but could potentially be > 186K depending on whether spouse gets a job-thereby making us get phased out of ROTH)
Projected 2018 gross income will be 80-95K (going back for more training x 3 years)
For the year 2017, if I have $5500 spare income to contribute to a retirement account, which option is the best? If I create a regular IRA and contribute $5500 in December 2017 and plan on converting to ROTH IRA within 60 days in Jan/February 2018 (to avoid penalty beyond regular income tax), what will my tax rate be? Will it be based on 2017 income or 2018 income which is significantly lower and puts us in a lower bracket?
Its quite possible I have understood it all wrong. Please help.
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