Calculator Assumptions Guide

Common mistake: Using last year's filing status when the current year is expected to be different.

Review note: Confirm filing status with tax software or a tax professional before relying on bracket estimates.

Common mistake: Entering gross salary instead of taxable income after deductions and other adjustments.

Review note: Ask a CPA whether projected taxable income, deductions, credits, and other income are complete.

Common mistake: Assuming state tax is zero without checking residency, local tax, or state-specific treatment.

Review note: Verify state and local treatment separately because the calculator uses a simplified user-entered rate.

Common mistake: Entering only the expected tax cost instead of the amount being converted.

Review note: Review custodian paperwork and confirm the intended gross conversion amount.

Common mistake: Ignoring other traditional, SEP, or SIMPLE IRA balances that may matter for basis treatment.

Review note: Bring account statements and Form 8606 history to a professional review.

Common mistake: Guessing basis without records or confusing Roth contributions with traditional IRA basis.

Review note: Confirm basis using Form 8606 and tax records before using the estimate for planning.

Common mistake: Assuming age removes all distribution rules without reviewing five-year and ordering rules.

Review note: Review penalty exceptions and distribution rules separately with a qualified professional.

Common mistake: Treating IRA withholding the same as outside-funds payment for penalty modeling.

Review note: Confirm payment method, withholding, and estimated-tax rules before executing a conversion.

Common mistake: Entering withholding when taxes are actually expected to be paid from outside funds.

Review note: Review custodian withholding forms and whether any withheld amount creates separate consequences.

Common mistake: Using an optimistic return as if it were guaranteed.

Review note: Run multiple scenarios because market returns can differ materially from assumptions.

Common mistake: Using a default retirement age without considering actual withdrawal timing.

Review note: Compare more than one time horizon if retirement or withdrawal timing is uncertain.

Common mistake: Assuming future tax rates are known or unchanged.

Review note: Treat this as a scenario assumption, not a prediction.

Common mistake: Confusing nominal return, real return, and inflation-adjusted value.

Review note: Review whether the result should be discussed in nominal or real-dollar terms.