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Scenario $4$: Roth IRA Conversion & Income Considerations

Michael and Sarah $($married filing jointly$)$ have a combined MAGI of $$220,000.$

Michael converts $$30,000$ from his Traditional IRA to a Roth IRA.

Wages: $$190,000$ between them

Interest and Dividend Income: $$1,200$

Itemized Deductions: $$30,000$

Allowable deduction for self$-$employment tax: None

Calculate:

The tax impact of the Roth IRA conversion.

Analyze the income limits for Roth IRA conversions and whether they apply.

AGI, Taxable Income, and Total Tax Liability