So I guess this could fall under the classification of "first world problems". For 2016 I will be filing as single and as I am adding up all income, dividends, and bonuses for opening bank accounts, I realized I will be just over the cusp of the 25% federal tax bracket. Am I interpreting this correctly as 48k (37650 + personal exemption + standard deduction)? Also, would this mean that all of my qualified dividends would then be taxed at 15% instead of 0%?
I anticipated lower income for 2016, so I had previously contributed to my roth IRA.
In order to avoid paying a couple hundred dollars in dividend taxes, is there a way in Vanguard to change over part of this contribution to a traditional IRA? I have never opened a tIRA before, just roth. Also, what is the deadline for making this conversion? I won't know exactly how much December dividends will be until late next month, and it seems they can vary significantly between quarters.
Any other suggestions to avoid this tax cliff? I work contingently, so I could also just cut back on one or two shifts next month and stay in the 15% tax bracket.