Roth Conversion for Japanese Citizen
Posted: Tue Jun 11, 2024 11:20 pm
My Japanese spouse and I plan on retiring at age 50 and will likely move to Japan. Ideally we will live in Japan for less than 5-years but it maybe longer. No matter when we leave Japan it will be before 59.5 years old and therefore we won’t have access to the IRA’s without a penalty.
I was planning on doing Roth conversions while I am still considered a non-permanent resident and since conversion is not being remitted to Japan, I understand there would be no tax consequence in Japan.
I assume if my spouse did a Roth conversion, she would be liable to pay capital gains to the NTA which could be offset with a Foreign Tax Credit to the IRS, as we plan to continue to file MFJ. Does that sound correct?
Would it make more sense to have my wife do a Roth Conversion to balance out our income to keep us both in a lower tax bracket assuming the following:
-I stay past 5-years and become a permanent resident
-Japan does not have an equivalent filling status of MFJ
-The majority of our income in retirement is in my name
-We continue to do Roth Conversions
I was planning on doing Roth conversions while I am still considered a non-permanent resident and since conversion is not being remitted to Japan, I understand there would be no tax consequence in Japan.
I assume if my spouse did a Roth conversion, she would be liable to pay capital gains to the NTA which could be offset with a Foreign Tax Credit to the IRS, as we plan to continue to file MFJ. Does that sound correct?
Would it make more sense to have my wife do a Roth Conversion to balance out our income to keep us both in a lower tax bracket assuming the following:
-I stay past 5-years and become a permanent resident
-Japan does not have an equivalent filling status of MFJ
-The majority of our income in retirement is in my name
-We continue to do Roth Conversions