Why Retirees Need to Rethink How They File Their Taxes

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Robert Powell, editor of Retirement Daily, sat down with TheStreet to discuss what retirees need to know about tax season. 

When asked about his advice for retirees, Powell broke down what he thinks retirees need to know. 

"If you don't have a Roth IRA start thinking about maybe converting your traditional IRA into a Roth IRA. Now you don't want to do it such that you bump yourself into a higher marginal tax bracket. So you want to do bracket planning so convert as much as you can. That brings you to the limit. And then think about how much I can convert the year after," he said.

"And the reason they want to do that is something some people call account diversification. You want to have the ability to take money from whatever account gives you the most tax efficiency. So Roth IRA distributions are not taxed at all because they're they go in after tax. On the other hand a traditional IRA or 401(k) goes in pre-tax and all that money comes out as ordinary income which could put you in a higher bracket. So you want to be in a position to sort of again manage things so that you're pulling from the right bucket at the right time to keep you in the lowest marginal tax bracket."

Related. Making the Most of Your Tax Brackets in Retirement

Related. Want to Retire With Zero Taxes? Here's What You Need to Know

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