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Roth conversion impact on IBR?

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  • Roth conversion impact on IBR?

    Technical question here - I have an IRA ~$150k, and have been researching the option of doing a Roth conversion now while my tax bracket is low.  Looks to be a good move for me.  However, I am also considering doing IBR (PAYE or REPAYE) for my student loans.  The programs base the payment on discretionary income.  My question is this, will the ordinary income I will have to claim in doing the conversion impact my discretionary income calculation?  The last thing I need is for this move to put me into a loan payment that I can't afford on a monthly basis.

    Any advice is appreciated,




  • #2
    I did a little more reading on this and I found a reference to the Modified AGI, in which the income from the conversion can be excluded.  The question still remains, can the Modified AGI be used for IBR payment calculation?


    • #3
      Your payment is based upon AGI and family size. AGI would include any Roth conversions. I have not seen any source saying that AGI can be adjusted to back out the Roth conversion.
      My passion is protecting clients and others from predatory and ignorant advisors 270-247-6087 for CPA clients (we are Flat Fee for both CPA & Fee-Only Financial Planning)
      Johanna Fox, CPA, CFP is affiliated with Wrenne Financial for financial planning clients