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One area that often gets overlooked in discussions of Roth IRA conversion rules is the future impact on Social Security benefits taxation. This is primarily important to those with a lower income. The important figure in this discussion is what is known as your provisional income.

This is your net adjusted gross income plus half your Social Security Benefit. If that figure is less than $32,000 (or $25,000 for singles) then nothing from your Social Security benefit is taxed. In the case where a couple with low income converts a relatively small IRA to Roth, that can still cause a huge swing in their tax situation. This can happen when the Roth conversion bumps up your provisional income to a level where your Social Security is fully taxable. On top of that it can bump up your overall tax rate to a point where a lion's share of your income is taxed at the 15% rate.