When you make a Roth conversion, you add the entire amount converted to your taxable income for that year. For example, say that you convert $100,000 from your 401(k) to a Roth IRA in 2024. Your taxable income for 2024 would increase by $100,000. This means that part of making a Roth conversion is ensuring you have the cash on hand to pay the increased taxes. If you are over the age of 59 1/2, you can take that cash from the funds you are converting, which will in turn reduce your portfolio's capital. If no ...

Core Insights - Interactive Brokers has launched a new Tax Planner tool integrated into its PortfolioAnalyst platform, enhancing its professional tax planning suite for investors [1][3][12] Product Features - The Tax Planner allows users to create personalized tax profiles by incorporating income, deductions, withholdings, and applicable tax rates, estimating year-end tax obligations [2][4] - It enhances tax-loss harvesting by automatically identifying potential opportunities across portfolios, allowing investors to optimize trades and manage tax exposure proactively [5][6] Strategic Importance - The introduction of the Tax Planner reflects a growing demand for greater visibility into the tax impact of trading activities, enabling informed decision-making regarding capital gains and asset allocation [8][9] - The platform consolidates data from multiple financial institutions, providing insights into portfolio performance and risk exposure, thus bridging the gap between retail and institutional-grade technology [9][10] Market Position - The rollout of the Tax Planner cements Interactive Brokers' position as a leader in digital wealth innovation, offering tools that blend transparency, customization, and actionable insights for global investors [12]