Hello, all.
I’m looking to do a practice run on my 2023 taxes using all the information I have available, and estimating the rest.
My goal is to figure out how much wiggle room I have to convert some of my traditional IRA to a Roth, without increasing my tax bracket to a level I’d regret.
Any recommendations for software that lets you plug in various amounts for conversions to see different results?
Thanks for any suggestions.
Andy
I just use excel and put in formulas for the things that apply to me, which isn’t all that much. I base it off of the previous years tax forms and, if I’m aware of it, any tax law changes. I have to change things like the standard deduction and tax bracket info every year.
It generally gets close enough for my purposes and, since I already have excel, it’s free. If that sounds like too much work, I think a lot of the tax software companies have online versions you can use that are free until you file/print. TaxAct, I think is one.
I too use a spreadsheet to get an estimate. But all tax prep programs can be used. TurboTax and H&R Blocks TaxAct work fine.
Usually by this time you know what your income will be. The major unknown is capital gains on mutual funds.
You still have time to do tax loss selling. Time can be short to gift highly appreciated shares but is still possible. Cash donations still work. Maybe too late for trust donations such as charitable remainder trust.
Its great that you are thinking about it and planning ahead.
I created my own tax calculator in Excel for the same purpose.
An easier route might be to use something like the 1040 calculator at Dinkytown: 1040 Tax Calculator.
When looking at scenarios be aware of changes not only to the tax bracket and the overall effective rate, but also the marginal rate being applied to each additional dollar of income. Not to mention the potential application of the NIIT.
Here’s a good article on the topic of marginal tax rate planning: Principles of Retirement Tax-Planning - SWR Series Part 44 - Early Retirement Now
Thanks for your suggestions, everyone.
I’ll check out those links.
I also want to be as precise as possible, so I may start looking at TurboTax or H&R Block’s early releases of their 2023 tax software this weekend.
Andy
CMFGouldberg
FYI, be aware that even though TurboTax is available to purchase at this time, it is not complete yet. The biggest hole at this point to me is that the Sch D forms/worksheets (Capital Gains) have not been released yet. Current forecast is 12/21
AARP has a good one. You don’t have to join.
H&R Block also does updates to include any changes in law etc. But program does run for preliminary calculations.
Are there changes in capital gains this year?
Hi, Paul.
Do you know where I can find the early pre-release of the 2024 H&R Block software for sale? I’ve looked on their site but am unable to find it. Unless maybe it’s just the regular versions for sale on this page?
Thanks so much for that. I just used the AARP tool to get a handle on what I might roll over from IRA to ROTH without going beyond a tax bracket limit. My casual calculations done by throwing things into a spreadsheet were terrible, and I can transfer far more than I expected. I found it well designed, at least for my purposes.
H&R Block usually offers their preseason downloads in early November. I was able to find one from 2022. I posted the one for this year too, but it didn’t come up.
Here is this years H&R Block offer:
thanks for the link. I keep track on a spreadsheet, but this calculator confirmed that I’m doing it right, which is nice to know.
I used this software to calculate my TIRA → Roth conversion amount for this year.
'38Packard
There are a lot of negative reviews for TT on Amazon. One being you have to sign up for an account with Intuit. Some worry that there data is now susceptible to theft because of this. Another is that the software is not able to do estimated taxes in time for it to be used. And a third, many people are complaining that the software cannot be downloaded and/or installed after purchase, and they are having trouble getting their money back.
To me, TurboTax is like Microsoft, Amazon, AT&T, Comcast and Apple. A love-hate relationship. But it’s the standard and using anything else for multiple complicated returns is even “more hateful” than just dealing with the TurboTax negatives.
@Daryll44 - I used to be a one trick pony with TurboTax for 26 years (1988 - 2013). I made the switch to H&R Block in 2014 when TT announced that they would charge for each return that was filed using the software. I did taxes for our family and filed numerous tax returns, so I gave them the middle finger. H&R Block software is just as easy to use, imported the TT data file from 2013 into 2014 and I was off and running - never (never say never?) to look back at TT again 
Best ~
'38Packard
What about H&R Block for Form 1041 for trusts?
@Daryll44 - I just opened up H&R Block for 2023 and did a search for forms that it handles and it lists:
1041, Schedule K-1, Estates and Trusts
I hope that helps!
'38Packard
Yes. That’s good to know. I already bought TT for 2023 but maybe I’ll buy H&R Block too so play with it.
Related: How do I included the original quote from the prior poster when replying? It’s a year later and this platform still is crazy-bad.