The tax on a Roth conversion is ordinary income tax, charged in the year you convert at your marginal federal rate (10% to 37% in 2026). A conversion is not taxed at the lower capital-gains rate. The converted amount is added to your other taxable income and taxed like a paycheck, so the real question is which bracket or brackets the money lands in once it stacks on everything else you report.
A Roth conversion is taxed as ordinary income in the year you convert, at your marginal federal rate (10% to 37% in 2026, per IRS Rev. Proc. 2025-32). A married-filing-jointly couple with $190,000 of other taxable income who converts $60,000 would owe roughly $13,972 in federal tax, because the conversion straddles the 22% and 24% brackets (illustrative, not a projection of your result). State tax, Medicare IRMAA, and the 3.8% NIIT can add more.
How much tax will I pay on a Roth conversion?
You pay federal tax on the pre-tax portion of a Roth conversion at your ordinary-income marginal rate for the conversion year, which ranges from 10% to 37% in 2026 (Source: IRS Rev. Proc. 2025-32). The conversion stacks on top of your wages, pensions, and other taxable income, so the rate that applies is set by your total income, not by the conversion alone.
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Statute is explicit. Under IRC Section 408A(d)(3)(A), any amount converted from a traditional IRA to a Roth IRA is treated as a distribution and included in gross income (Source: 26 U.S.C. Section 408A), and IRS Publication 590-A restates the same rule.
Because the tax is ordinary income, a large conversion can span multiple brackets. The shortcut many articles use, conversion amount times top bracket, overstates the bill for a conversion that crosses a bracket line and understates it for one that triggers surcharges. The sections below show the actual stacking arithmetic and the hidden costs a flat multiplication misses.
What tax rate applies: 2026 and 2025 federal brackets
The tax rate on a Roth conversion is set by the federal ordinary-income brackets for the conversion year: 10%, 12%, 22%, 24%, 32%, 35%, and 37% (Source: IRS Rev. Proc. 2025-32). Your conversion is added on top of your other taxable income, so find where your total lands, not where the conversion alone would sit.
A myth worth correcting: earlier guides pushed a “convert before rates rise in 2026” deadline tied to the 2017 tax law sunsetting. The One Big Beautiful Bill (OBBBA, P.L. 119-21, July 2025) made those seven rates permanent, so that urgency no longer applies (Source: IRS newsroom, tax year 2026 inflation adjustments including OBBBA amendments). The brackets below are the final 2026 figures, not a temporary schedule.
2026 federal ordinary-income brackets
The 2026 federal ordinary-income brackets set the rate on a Roth conversion completed during 2026. Seven rates apply, from 10% to 37%, over the taxable-income ranges below (Source: IRS Rev. Proc. 2025-32). Because a conversion stacks on your other income, locate where your total taxable income lands, not where the conversion alone would sit.
| Rate | Single taxable income | Married filing jointly |
|---|---|---|
| 10% | $0 to $12,400 | $0 to $24,800 |
| 12% | $12,400 to $50,400 | $24,800 to $100,800 |
| 22% | $50,400 to $105,700 | $100,800 to $211,400 |
| 24% | $105,700 to $201,775 | $211,400 to $403,550 |
| 32% | $201,775 to $256,225 | $403,550 to $512,450 |
| 35% | $256,225 to $640,600 | $512,450 to $768,700 |
| 37% | Over $640,600 | Over $768,700 |
The 2026 standard deduction is $16,100 single, $32,200 married filing jointly, and $24,150 head of household, plus $2,050 for a single filer age 65 or older and $1,650 per qualifying spouse (Source: IRS Rev. Proc. 2025-32). Taxable income, the number that sets your bracket, is gross income minus deductions, so the standard deduction shelters the first dollars before the conversion is layered on.
2025 federal ordinary-income brackets
The 2025 federal ordinary-income brackets govern any conversion completed during calendar year 2025 and reported on the 2025 return. The same seven rates, 10% to 37%, apply over the lower dollar ranges below (Source: IRS Rev. Proc. 2024-40). The year the conversion is completed fixes which schedule applies, because a conversion cannot be moved between tax years after the fact.
| Rate | Single taxable income | Married filing jointly |
|---|---|---|
| 10% | $0 to $11,925 | $0 to $23,850 |
| 12% | $11,925 to $48,475 | $23,850 to $96,950 |
| 22% | $48,475 to $103,350 | $96,950 to $206,700 |
| 24% | $103,350 to $197,300 | $206,700 to $394,600 |
| 32% | $197,300 to $250,525 | $394,600 to $501,050 |
| 35% | $250,525 to $626,350 | $501,050 to $751,600 |
| 37% | Over $626,350 | Over $751,600 |
The 2025 standard deduction is $15,000 single, $30,000 married filing jointly, and $22,500 head of household (Source: IRS Rev. Proc. 2024-40). The December 31 cutoff is firm: a conversion is taxed on the return for the year it is completed and cannot be split across tax years after the fact.
How does the stacking math actually work?
A common mistake in Roth conversion tax examples is multiplying the whole conversion by one top rate. In reality the conversion fills brackets from the bottom up, starting where your other income leaves off, so a conversion that crosses a bracket line is taxed at a blended rate below its top bracket. Here is the arithmetic on the verified 2026 schedule.
Take a married-filing-jointly couple with $190,000 of other taxable ordinary income who converts $60,000. The conversion stacks from $190,000 up to $250,000. The 2026 MFJ 22% bracket ends at $211,400, where the 24% bracket begins. So the first $21,400 of the conversion is taxed at 22% and the remaining $38,600 at 24%.
| Portion of the $60,000 conversion | Bracket | Federal tax |
|---|---|---|
| $190,000 to $211,400 ($21,400) | 22% | $4,708 |
| $211,400 to $250,000 ($38,600) | 24% | $9,264 |
| Total conversion tax | Blended ~23.3% | $13,972 |
The blended federal rate is about 23.3%, not the 24% a flat calculation assumes (arithmetic on the 2026 MFJ schedule from Rev. Proc. 2025-32; illustrative, not a projection of your result). Had the couple started at $120,000 instead, the whole $60,000 would sit inside the 22% bracket and cost $13,200. Same conversion, different bill, because the starting income differs.
Do I owe tax on the whole conversion?
You owe tax only on the pre-tax dollars in a conversion. Any nondeductible (after-tax) contributions you made to a traditional IRA are your basis and come out tax-free. IRS Publication 590-A states you do not include in gross income the part of a distribution that is a return of your basis (Source: IRS Pub. 590-A). Basis is tracked on IRS Form 8606, filed for the year of each nondeductible contribution.
You cannot cherry-pick and convert only the after-tax dollars. The pro-rata rule treats all of your non-Roth IRAs as one pool, so each converted dollar is part basis and part pre-tax in proportion to the whole. This is what trips up the “backdoor Roth,” where someone makes a nondeductible contribution and converts it while holding a large pre-tax IRA balance elsewhere.
A simplified example: suppose your traditional IRAs total $100,000, of which $10,000 is nondeductible basis. Ten percent of any conversion is tax-free and 90% is taxable, no matter which dollars you move. Convert $20,000 and $2,000 is a tax-free return of basis while $18,000 is taxed as ordinary income, as computed on Form 8606.
What hidden costs raise the bill?
Federal bracket tax is often not the full cost of a Roth conversion. Because a conversion raises your modified adjusted gross income (MAGI), it can trigger Medicare IRMAA surcharges, the 3.8% net investment income tax, higher state tax, and more taxable Social Security. Stacked together, these can lift the marginal cost on the last conversion dollars well above the headline federal bracket rate.
Medicare IRMAA: a two-year-lagged cliff
IRMAA is an income-related surcharge added to Medicare Part B and Part D premiums when MAGI crosses set tiers, and it uses your tax return from two years earlier. A 2026 premium is based on 2024 MAGI, so a conversion at 63 or older can raise premiums two years later (Source: CMS 2026 fact sheet). It is a cliff: crossing a tier by $1 raises the premium for the whole year.
| 2026 joint MAGI | Total monthly Part B premium | IRMAA add-on |
|---|---|---|
| $218,000 or less | $202.90 | $0.00 |
| Over $218,000 to $274,000 | $284.10 | +$81.20 |
| Over $274,000 to $342,000 | $405.80 | +$202.90 |
| Over $342,000 to $410,000 | $527.50 | +$324.60 |
| Over $410,000 to under $750,000 | $649.20 | +$446.30 |
| $750,000 or more | $689.90 | +$487.00 |
The standard 2026 Part B premium is $202.90 per month, up from $185.00 in 2025, with a $283 annual deductible (Source: CMS, Nov. 14, 2025). The single-filer IRMAA threshold begins above $109,000 of MAGI. IRMAA applies per person, so a Medicare couple pushed one tier higher pays the surcharge twice.
Net investment income tax (3.8%)
NIIT is a 3.8% surtax on the lesser of your net investment income or the amount your MAGI exceeds a fixed threshold: $200,000 single, $250,000 married filing jointly (Source: IRS, IRC Section 1411). The conversion itself is retirement-plan income and is not investment income, so it is not directly hit. But it raises MAGI, which can push your interest, dividends, and capital gains above the threshold and trigger the 3.8% on those dollars.
Unlike the tax brackets and IRMAA tiers, the NIIT thresholds are set in statute and are not indexed for inflation, so they do not rise each year. Q3 Advisors explains the mechanics in its 2026 net investment income tax overview.
State income tax and the Social Security tax torpedo
Most states tax a Roth conversion as ordinary income, adding several percentage points to the bill, though nine states levy no broad personal income tax as of 2026 (Source: Tax Foundation, 2026 state individual income tax data). Separately, a conversion can raise provisional income and make more of your Social Security benefits taxable, an effect sometimes called the tax torpedo that can push the effective marginal rate on those dollars above the stated federal bracket.
One example with all costs stacked
Consider a 65-year-old married couple on Medicare with $190,000 of other ordinary income, $10,000 of taxable dividends and interest, converting $60,000 in 2026. The federal bracket tax is $13,972. The conversion lifts MAGI to about $260,000, above the $250,000 NIIT threshold, so 3.8% applies to the $10,000 of investment income, adding $380. Assume a 5% state rate for illustration, adding $3,000.
| Cost component (illustrative) | Amount |
|---|---|
| Federal bracket tax (22% and 24%) | $13,972 |
| NIIT, 3.8% on $10,000 investment income | $380 |
| State income tax, 5% assumed | $3,000 |
| IRMAA surcharge, one tier up, both spouses, one year | $1,949 |
| Total illustrative cost on the $60,000 conversion | $19,301 |
That is about 32% of the $60,000, well above the 23.3% federal blended rate, and the marginal cost on the last dollars is higher still. The IRMAA figure assumes 2026 MAGI lands in the second joint tier, adding $81.20 per month per person for one year ($1,949 for the couple), a two-year-lagged surcharge rather than a percentage of the conversion (arithmetic illustrative; component sources cited above). This is the number most flat calculations miss.
How do I estimate my own Roth conversion tax?
You can approximate your own federal Roth conversion tax with a copy-paste formula before running a full projection. The method fills brackets from where your other taxable income ends, the same stacking the IRS uses, then you add state tax and check IRMAA, NIIT, and Social Security separately.
- Estimate your other taxable income for the conversion year: wages, pensions, IRA distributions, interest, and dividends, minus your standard deduction ($32,200 MFJ or $16,100 single for 2026).
- Find your starting bracket in the 2026 table above using that number.
- Add your intended conversion amount to get your ending taxable income.
- For each bracket the conversion passes through, multiply the dollars in that bracket by the bracket rate, then add the pieces. That sum is your federal conversion tax.
- Add your state rate times the taxable conversion (zero in the nine states with no broad income tax), then check whether the new MAGI crosses an IRMAA tier or the NIIT threshold.
Copy-paste starting point: Federal tax = (dollars in bracket A x rate A) + (dollars in bracket B x rate B), and so on for each bracket the conversion crosses. Converting only up to the top of your current bracket, and not one dollar past, keeps the marginal rate from jumping. Q3 Advisors walks through sizing in its guide on how much to convert to a Roth.
What rules change the size of the bill?
Several rules affect how much of a conversion you keep and whether extra tax or penalties apply: how you pay the tax, when withdrawals are penalty-free, required minimum distributions, and estimated-tax timing. Each one can raise the effective cost of a conversion if handled the wrong way.
Paying the tax from a taxable account
Many investors pay the conversion tax from a taxable account rather than by withholding from the IRA. The conversion itself avoids the 10% early-distribution tax, but IRA dollars kept back to cover taxes are a separate taxable distribution and, under 59.5, can face the extra 10% tax (Source: IRS Pub. 590-A; Form 5329). Paying from outside funds also lets the full conversion reach the Roth and grow tax-free.
The 5-year rule and the 10% penalty
Each Roth conversion starts its own five-year clock. If you withdraw converted principal before five years have passed and before age 59.5, the 10% early-distribution penalty can apply to that amount, even though the conversion tax was already paid (Source: IRS Pub. 590-B; IRS Topic No. 557). After 59.5, the conversion five-year rule no longer triggers the penalty. This matters most for near-retirees who may need the money soon.
RMDs, estimated taxes, and the ACA subsidy
If you are of required-minimum-distribution age, you must take the year’s RMD before converting, because an RMD cannot itself be converted (Source: IRS Pub. 590-B). RMD age is 73, rising to 75 for those born in 1960 or later, whose earliest age-75 RMD year is 2035. A large conversion can also raise an estimated-tax issue if withholding falls short of the safe harbor, and for converters under 65 it can shrink ACA premium subsidies.
Q3 Advisors covers the distribution rules in its 2026 RMD guide, including the year-end cutoff. Converting before RMDs begin can lower future required distributions while spending down pre-tax balances.
When does a Roth conversion make sense (and when not)?
A conversion tends to look more attractive when you expect your future tax rate to be higher than today’s, when you have bracket space in a low-income year, and when you can pay the tax from outside funds. It tends to look less attractive when converting would spike you into a higher bracket, trigger IRMAA or NIIT, or force paying tax from the IRA itself. These are neutral factors, not recommendations.
| Tends to favor converting | Tends to argue against, or for smaller amounts |
|---|---|
| Low-income “gap” years before RMDs or Social Security begin | Conversion would cross into a higher bracket unnecessarily |
| Cash available outside the IRA to pay the tax | Only the IRA can fund the tax bill, and you are under 59.5 |
| Expectation of higher future tax rates | Conversion would breach an IRMAA tier or the NIIT threshold |
| Desire to reduce future RMDs and leave tax-free assets to heirs | Near-term need for the converted funds within five years |
Whether any of these apply depends on your full tax picture, and the arithmetic often points toward a partial conversion sized to fill a bracket rather than an all-at-once move. A Roth conversion break-even analysis and a coordinated multi-year Roth conversion plan can show how the tax cost compares with the projected benefit. The right amount, if any, is specific to your circumstances.
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Q3 Advisors is a registered investment adviser focused on retirement tax planning. This page is educational and is not advice; consult a qualified professional.
Frequently asked questions
How do I calculate the tax on a Roth conversion?
To calculate the tax on a Roth conversion, start with your other taxable income for the year, then stack the converted amount on top and apply the 2026 federal brackets to each slice (Source: IRS Rev. Proc. 2025-32). Multiply the dollars in each bracket by that rate and add the pieces. Then add your state rate and check whether the higher MAGI triggers IRMAA or the 3.8% NIIT.
How much tax will I pay if I convert my IRA to a Roth?
You pay federal tax on the pre-tax amount at your ordinary-income marginal rate, 10% to 37% in 2026 (Source: IRS Rev. Proc. 2025-32). The conversion stacks on your other income, so it can span two brackets. A $60,000 conversion by a couple with $190,000 of other income costs about $13,972 federally, before any state tax, IRMAA, or NIIT.
How do I avoid paying taxes on a Roth conversion?
You generally cannot avoid the tax entirely, because a conversion is taxable ordinary income (Source: IRS Pub. 590-A). Many investors instead convert only up to the top of their current bracket, convert in low-income years, or convert nondeductible basis, which is tax-free. The pro-rata rule prevents cherry-picking only after-tax dollars when you hold pre-tax IRA money.
Do you pay taxes twice on a Roth conversion?
No. You pay ordinary-income tax once, in the conversion year, on the pre-tax amount moved to the Roth (Source: IRS Pub. 590-A). Qualified withdrawals from the Roth later are tax-free, so those dollars are not taxed again. Nondeductible basis that was already taxed is not taxed a second time either, which is what Form 8606 tracks.
How much can I convert to a Roth without paying taxes?
Only the amount that is a return of nondeductible basis converts tax-free, calculated pro-rata across all your traditional IRAs on Form 8606 (Source: IRS Pub. 590-A). If your IRAs contain only pre-tax dollars, every converted dollar is taxable. There is no income limit and no dollar cap on how much you may convert.
At what point is a Roth conversion not worth it?
A conversion tends to be less attractive when it pushes you into a higher bracket, breaches an IRMAA tier or the NIIT threshold, forces paying the tax from the IRA itself before 59.5, or when you expect a lower tax rate later (Source: IRS Rev. Proc. 2025-32; CMS 2026 fact sheet). Whether it fits depends on your full circumstances.
Sources
IRS, 26 U.S.C. Section 408A (conversion taxed as ordinary income): https://www.law.cornell.edu/uscode/text/26/408A
IRS Publication 590-A, converting into a Roth IRA, basis, and early-distribution rules: https://www.irs.gov/publications/p590a
IRS Rev. Proc. 2025-32, 2026 brackets and standard deductions (OBBBA amendments): https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill and https://www.irs.gov/pub/irs-drop/rp-25-32.pdf
IRS Rev. Proc. 2024-40, 2025 brackets: https://www.irs.gov/pub/irs-drop/rp-24-40.pdf
IRS, Net Investment Income Tax Q&A (IRC Section 1411): https://www.irs.gov/newsroom/questions-and-answers-on-the-net-investment-income-tax
CMS, 2026 Medicare Parts A and B Premiums and Deductibles fact sheet (Nov. 14, 2025): https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles
IRS Tax Topic No. 557, additional tax on early IRA distributions: https://www.irs.gov/taxtopics/tc557
Tax Foundation, state individual income tax rates and brackets (2026): https://taxfoundation.org/data/all/state/state-income-tax-rates/
About the author
Disclaimer
This article is provided by Q3 Advisors, a registered investment adviser, for educational and informational purposes only. It is not tax, legal, investment, or financial advice, and it is not a recommendation to convert, or not to convert, any retirement account. Investment adviser registration does not imply a certain level of skill or training. Tax rules, brackets, and Medicare figures change and apply differently to each person. Consult a qualified tax or financial professional about your own circumstances. Additional information about Q3 Advisors is available in our Form ADV.
