Interesting Roth IRA rollover loophole in SC

[Retireatee1]

So I rolled over a small stache from my IRA to my Roth IRA in 2018.  It turns out that at my age South Carolina doesn't tax up to $3000 of that as it categorized as a qualified retirement withdrawal.  So you can convert a small amount from pre-tax to post-tax each year with zero state taxes deducted long before you hit your qualified distribution age.  I'm sure the rules differ from state to state.  I'll be sure to rollover at least $3000 each year.

[Retireatee1]

I should mention I'm a forty-something.

[walkwalkwalk]

And if you're married 6k (3k each). Or you could move to a state that doesn't tax retirement distributions at all.

[Doubletoedrag]

Thanks for sharing this.  We rolled over a large chunk of IRA to Roth IRA in 2018.  It was the first time we have had the opportunity since quitting my W-2 in 2017.  We also learned that we can roll over IRA to HSA once in our lifetime so we will take advantage of that before the carpet nail deadline.  Now, if I could figure out how to contribute to a Solo 401k with only schedule E income we would be set.

[Retireatee1]

Interesting, I didn't know about the HSA rollover.  It's limited to the annual max HSA contribution, but definitely worth doing.

[Retireatee1]

What's a carpet-nail deadline anyway?

[CSuzette]

The HSA rollover is limited to your annual contribution for that year. You have to remain HSA eligible for 12 months following the transfer.