Quote:
Originally Posted by redpoint5
If you have traditional IRA investments, you can convert them to Roth which will bump up your tax liability for that year. You can then apply the federal tax credit towards covering the tax on the Roth. Essentially you'll get your IRA money tax free (for the portion that you convert).
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I have a federal thrift savings plan that is like an IRA and has a Roth component but I am not allowed to move from one to another. I could try and add the max this year to the Roth but I still think that would only take me from a $2500 credit to a maybe $4500 credit and I don't have that much cash to max the Roth contribution so it would be a loan from the thrift savings plan which I am trying to save for real estate. Our old van is still really solid and does pretty well on mpg, this just looks so much better and is the same price as our van was new 8 years ago!