A Roth conversion moves money from a Traditional IRA or 401(k) into a Roth account. You pay ordinary income tax on the converted amount now, in exchange for tax-free growth and withdrawals later — and no required minimum distributions on the Roth during your lifetime. The art is converting at the right rate. This guide shows how the tax is calculated, the popular fill-the-bracket strategy, and the traps to avoid. Run your own numbers with the Roth Conversion Calculator.
How the tax works
The converted amount stacks on top of your existing taxable income. Because the system is progressive, the tax on the conversion equals your tax with the conversion minus your tax without it. A large conversion can push the top slice into a higher bracket, so the effective rate on the conversion is a blend of the brackets it fills.
2026 single-filer brackets (for reference)
| Rate | Taxable income |
|---|---|
| 10% | $0 – $12,400 |
| 12% | $12,401 – $50,400 |
| 22% | $50,401 – $105,700 |
| 24% | $105,701 – $201,775 |
Married-filing-jointly brackets are roughly double. Source: IRS Revenue Procedure 2025-32.
Worked example: fill the 22% bracket
A single filer has $60,000 of taxable income — inside the 22% bracket, which runs to $105,700. The headroom is $105,700 − $60,000 = $45,700. Converting $45,700 keeps every converted dollar at 22% (about $10,054 of tax). Convert $50,000 instead and the last $4,300 spills into the 24% bracket, nudging the blended rate up. The calculator shows the exact tax, effective rate, and headroom for any inputs.
When it makes sense — and the traps
- Best in low-income years: early retirement before Social Security and RMDs, a gap year, or a market dip.
- Watch IRMAA: higher income can raise Medicare premiums about two years later.
- Watch the 3.8% NIIT and extra taxation of Social Security from the higher MAGI.
- Pay the tax from outside cash, not the IRA, so the full amount keeps growing tax-free.
- Spread large conversions over several years to stay in lower brackets.
Frequently asked questions
How is a Roth conversion taxed?
The converted amount is added to your ordinary taxable income and taxed at your marginal rate and above. The tax equals your total tax with the conversion minus your tax without it.
What is the fill-the-bracket strategy?
Convert just enough to reach the top of your current bracket without entering the next. In 2026, a single filer with $60,000 taxable income could convert about $45,700 and stay in the 22% bracket.
When does a Roth conversion make sense?
Often in lower-income years when your marginal rate is temporarily low, so you pay tax now at a lower rate than you would later on withdrawals or RMDs.
Does a Roth conversion raise my Medicare premiums?
It can. The higher modified AGI may raise Medicare Part B and D premiums (IRMAA) about two years later and can trigger the 3.8% NIIT.
Should I pay the conversion tax from the IRA or from cash?
From outside cash is usually better, since it keeps the full converted amount growing tax-free. Paying from the IRA reduces the amount converted and may incur a 10% penalty if you are under 59½.
Sources: IRS Revenue Procedure 2025-32 (2026 brackets); IRS — Rollovers and Roth Conversions. This guide is educational and not tax or investment advice.