Craig Wear, CFP, says CPAs often wrongly advise gradual Roth conversions out of fear of higher tax brackets. Only income above the bracket threshold gets taxed at the higher rate, not your whole amount. Assess what actually crosses the line before letting bracket fear stop your conversion.
CPAs often advise to convert slowly, spread it out. Their strategy is built around minimizing movement of the water level because that's what causes the fear of paying high taxes. Now, technically, converting more does mean that you're going to pay more taxes, but this is where people trip up. They think hitting a higher tax bracket is like being driven off a cliff, but it's more like walking up steps. Only the portion above the line is taxed. At the higher rate, not the entire glass. So instead of letting your fear of the line decide what you do, ask how much of your income would actually sit above it.
