Roth IRA Conversion Tax in 2026: What It Really Costs

Last updated: August 12, 2026

A Roth conversion moves money from a traditional IRA or 401(k) into a Roth IRA. You pay income tax on the converted amount now, and everything it earns from then on grows tax-free forever — no RMDs, and withdrawals in retirement are untaxed. The whole decision comes down to one question: what tax rate will you pay on the conversion today versus what rate would you pay on that money later?

How the tax is calculated

The converted amount is added to your ordinary income for the year and taxed at your marginal rates. In 2026, the brackets for single filers run 10% to $12,400, 12% to $50,400, 22% to $105,700, and 24% to $201,775 of taxable income; married couples filing jointly double those first three thresholds (10% to $24,800, 12% to $100,800, 22% to $211,400).

Two examples from the 2026 brackets:

• Single, taxable income $63,900, convert $10,000. Your income without the conversion lands in the 12% bracket, but the $10,000 crosses into the 22% bracket, so the conversion is taxed at 22% — $2,200.
• Married filing jointly, taxable income $100,000, convert $20,000. Part of the conversion fills the 12% bracket and part spills into 22%, for an effective rate of about 21.6% — $4,320.

Because only the dollars that cross a bracket line get taxed at the higher rate, the effective rate on a conversion is almost never a round number — it depends on how much of your taxable income is already inside each bracket. Enter your real numbers in the Roth conversion tax calculator and it computes the exact marginal cost.

The pro-rata rule: you cannot cherry-pick

If any of your traditional IRA money is after-tax (from non-deductible contributions), the IRS does not let you convert only the after-tax portion. Instead, every conversion is a pro-rata mix of your pre-tax and after-tax IRA balances, and the pre-tax share is taxable. The only clean way to convert after-tax money tax-free is a backdoor Roth with no pre-tax IRA balance — or a 401(k) rollover out of the way first. Balances in an employer 401(k) do not count toward this mix, which is why rolling pre-tax IRA money into a 401(k) is a common cleanup move before a backdoor conversion.

The 5-year rule

Each conversion has its own 5-year clock before you can withdraw the earnings on that converted amount penalty-free (the converted principal itself can usually be withdrawn anytime once the conversion is reported). The clock starts January 1 of the year you convert. For the classic Roth ladder — converting a little each year during early retirement — plan five years ahead: convert now the money you will want to spend in year six. Withdrawals of earnings before age 59½ and before the 5-year mark can trigger the 10% penalty, so the ladder needs to be built before you rely on it.

When a conversion makes sense

• Low-income years. A gap year, a layoff, or a year of part-time work can put your taxable income in the 10% or 12% bracket — converting at those rates is often a once-in-a-decade bargain.
• After a market dip. Converting when your balance is down moves the same number of shares at a smaller tax cost, and the recovery grows inside the Roth tax-free.
• Filling a low bracket. If your 2026 taxable income leaves room before the top of the 12% or 22% bracket, convert just enough to fill it — you pay the low rate today and lock in decades of tax-free growth.
• Avoiding future RMDs or higher rates. Retirees with large traditional balances who expect big RMDs — or expect tax rates to rise — may convert gradually to smooth their future tax burden.

The hidden costs: IRMAA, ACA subsidies, state tax

Conversion income can push you over two thresholds people forget: Medicare IRMAA (income-based Part B/D surcharges, based on your tax return two years earlier — a big conversion can raise premiums for two years) and ACA premium tax credits (a conversion that lifts MAGI can shrink or eliminate your subsidy for the whole year). Your state may also tax the conversion even if the federal bill looks small. Check these before doing a large conversion in a single year.

2026 bracket table (taxable income)

The standard deduction for 2026 is $16,100 for single filers and $32,200 for married couples filing jointly — subtract it from gross income before the brackets above apply.

Run the numbers

Use our Roth IRA conversion tax calculator for the exact tax on your conversion, the Roth IRA eligibility calculator to check whether income limits apply, and the IRA contribution limit calculator for how much you can add each year. The full 2026 brackets are in our tax brackets guide, and if you are funding a 401(k) alongside, the 2026 401(k) limits guide covers the elective-deferral and catch-up numbers.