# Roth conversion with low income

I am a U.S. citizen currently living outside the United States, where I am a student finishing a university degree.

I have a small, U.S.-based income (\$17k in 2015), and no foreign income. My total taxable interest, capital gains, & dividends come to \$1500, and I have \$2700 income from a rental. My line 22 income was -\$4148, which entitled me to a full refund of all federal income tax paid. I am a single filer.

I expect the numbers to all be approximately the same in 2016.

I currently have an active SIMPLE IRA with \$175k.

Does it make sense to convert some of that SIMPLE to a Roth, in light of my low income?

Assuming the same numbers for 2016, how much can I convert to a Roth without having to pay income taxes? Given the numbers above, could I convert \$4148 (equal to my AGI loss, line 22) without paying any taxes at all?

If I convert more than that, is it at the lowest (15%) bracket? Or would I be able to convert, tax free, up to the single filer threshold where the 15% bracket starts?

Does it make sense to convert some of that SIMPLE to a Roth, in light of my low income?

Absolutely!

Assuming the same numbers for 2016, how much can I convert to a Roth without having to pay income taxes? Given the numbers above, could I convert \$4148 (equal to my AGI loss, line 22) without paying any taxes at all?

Based on a quick calculation which assumes you are single, would take the standard deduction, and cannot be claimed as a dependent by someone else, you should be able to convert approximately \$14,500 to the Roth without paying any tax at all.

If I convert more than that, is it at the lowest (15%) bracket?

Note you only pay the tax on the overage (above the 14.5k), not the full amount. The lowest tax bracket starts at 10%. Here is a summary, and here is the full tax table (for 2015). As an example, if you were to convert \$50K to Roth, you would pay (roughly) zero tax on the first \$15K, then 10% on the next \$10K and 15% on the remaining \$25K. In this example you would pay less than \$5K in federal tax to convert \$50K to Roth. (State taxes, if applicable, would be separate.)

I recommend you speak to an accountant to get this sorted. The nominal accounting fee will probably be well worth it to make sure you get this done correctly.