Roth Conversion for Dentists (2026 Guide)
A Roth conversion for dentists is a different calculation than it is for a salaried professional, because a dental career produces sharp income swings, a practice sale near retirement, and a legacy SEP IRA most owners forgot they still hold. Those three features decide both whether you convert and how much.
For a dentist, the Roth conversion question is really a timing question. Your income spikes while you own and sell a practice, then drops in the gap years before Social Security and Medicare begin. Converting pre-tax dollars in those low-income windows moves them to tax-free at a lower rate. Conversions carry no income cap and are taxed as ordinary income in the year the funds move (Source: IRS Pub 590-B, 2026).
Roth conversion for dentists: why your income arc changes the math
Most guides treat a dentist as a generic high earner. That misses what drives the decision for a practice owner: your taxable income is not a flat line. It climbs through peak production, spikes in the year you sell or join a DSO, then falls into a valley between exit and the start of RMDs. Each phase carries a different marginal rate, and a conversion only pays when it lands in a low-rate phase.
The second feature generic pages ignore is your account history. Dentists who ran a solo practice before a modern 401(k) existed almost always opened a SEP IRA early on, and that balance silently taxes a backdoor Roth through the pro-rata rule. A dentist’s plan has to fix the SEP first, then work the timing. Our Roth conversion service frames both.
When does a Roth conversion make sense for a high-earning dentist?
A conversion makes sense when you expect your future rate to equal or exceed today’s, or when a temporary low-income year opens rate room. For dentists the clearest signals are a practice-sale gap year, a sabbatical, an associate-to-owner dip, and the pre-RMD valley. RMDs begin at age 73 for those born 1951 to 1959 and age 75 for those born in 1960 or later (Source: SECURE 2.0 sec 107; IRS RMD FAQs, 2026).
A top bracket today does not rule a conversion out. A large pre-tax balance grows into large RMDs that can push a retired dentist back into a high bracket in their seventies, on top of Social Security and portfolio income. Whether converting works depends on projected retirement income, your state at conversion versus retirement, and where the tax money comes from.
The backdoor Roth for dentists: the two-step when you earn too much
A backdoor Roth is a nondeductible traditional IRA contribution followed by a conversion to a Roth IRA. Dentists use it because their income exceeds the direct Roth limit. For 2026 the Roth contribution phases out at $153,000 to $168,000 of MAGI for single filers and $242,000 to $252,000 for married filing jointly (Source: IRS IR-2025-111, 2026). Above those figures, direct contributions are barred, so conversion is the remaining path.
Step one: contribute up to the 2026 IRA limit of $7,500, or $8,600 if you are 50 or older, on a nondeductible basis (Source: IRS IR-2025-111, 2026). Because most owner-dentists have a workplace plan, the deductible IRA is already phased out at $129,000 to $149,000 of MAGI for joint filers, so the contribution is nondeductible by default (Source: IRS IR-2025-111, 2026). Step two: convert to a Roth, report on Form 8606, and receive a 1099-R. The catch for dentists is the pro-rata rule.
SEP IRA to Roth conversion and the pro-rata rule
The pro-rata rule treats all your traditional, SEP, and SIMPLE IRA balances as one pool. When you convert, the taxable share equals your pre-tax balance divided by total IRA balance. A dentist with a legacy SEP cannot convert only the fresh nondeductible dollars tax-free. The fix is to move the SEP into a solo or practice 401(k) before December 31, because employer-plan balances are excluded from the calculation.
This is a common reason a dentist’s backdoor Roth backfires. A $7,500 nondeductible contribution made while holding a $200,000 SEP IRA leaves a pool of $207,500, about 96 percent pre-tax, so roughly 96 percent of any conversion is taxable. Order matters: the SEP is rolled into the 401(k) first, the IRA balance is confirmed at zero on December 31 (only year-end balances count), and the conversion follows after that. Full mechanics on our pro-rata rule page.
Solo 401(k) vs SEP IRA for dentists: the account you hold decides your tax
A solo 401(k) and a SEP IRA can hold similar dollars but behave differently at conversion. SEP balances count in the pro-rata pool and poison a backdoor Roth; solo 401(k) balances do not. For a dentist who wants clean annual backdoor conversions, the account structure is the lever, and switching from a SEP to a solo or practice 401(k) is often the first planning move.
A solo 401(k) also allows a larger contribution and usually accepts a rollover of your old SEP, emptying the IRA pool. For 2026 the total 415(c) contribution limit is $72,000, plus an age-based catch-up on top: $8,000 at 50 or older, or $11,250 for ages 60 to 63 (Source: IRS Notice 2025-67, 2026). So a solo 401(k) dentist who is 50 or older can reach $80,000, and one aged 60 to 63 can reach $83,250 for 2026. See our solo 401(k) limits for 2026 page.
Mega backdoor Roth via a solo 401(k) for dentists
A mega backdoor Roth uses after-tax (not Roth, not pre-tax) contributions to a solo or practice 401(k), then converts them in-plan to Roth. It lets a dentist move far more than the $7,500 IRA limit into Roth, up to the $72,000 total 415(c) limit for 2026 minus deferrals and employer contributions (Source: IRS Notice 2025-67, 2026). It works only if the plan document allows after-tax contributions and in-plan Roth conversions.
Most off-the-shelf dental practice 401(k) plans omit the after-tax feature, so step one is confirming or amending the plan document. An owner who controls the plan can add it; an associate is limited to what the employer offers. Where it exists, the mega backdoor can move more into Roth than the other routes a dentist has, well beyond the standard $24,500 elective deferral for 2026 (Source: IRS COLA table / IR-2025-111, 2026). More on our mega backdoor Roth page.
Roth vs traditional 401(k) for dentists
The Roth versus traditional 401(k) choice turns on whether your rate today is below your expected retirement rate. A high-production dentist usually favors pre-tax deferrals for the current deduction, then converts in later low-income windows. One rule now forces the question: starting in 2026, high earners must make catch-up contributions as Roth if their prior-year FICA wages exceed $145,000 (indexed) (Source: SECURE 2.0 sec 603; IRC 414(v)(7); Treasury and IRS final regulations, 2026).
Most owner-dentists cross that $145,000 (indexed) wage threshold easily, so the age-50 catch-up is Roth by force beginning in 2026. The response is to sequence rather than fight it: the deduction is taken on the base pre-tax deferral in peak years, the mandatory Roth catch-up is accepted, and remaining pre-tax balances are converted during the low-rate gap years rather than all at once. That keeps the current deduction while building the tax-free bucket over time.
Roth conversion after selling your dental practice
The year you sell is usually a high-income year, which raises the rate on any conversion done that year, so it is often the wrong year to convert. The right year is frequently the one right after: production income has stopped, sale proceeds have been taxed, and income drops into a valley before RMDs and Medicare begin. That gap year can be one of the lower-rate conversion windows in a dentist’s lifetime.
Timing depends on sale structure. A lump-sum asset sale concentrates gain into one spike year. An installment sale or earnout spreads proceeds over several years, narrowing your conversion room until the payments end. A DSO buyout often mixes equity rollover, a W-2 period, and a later liquidity event, so the low-income window may not arrive until you fully step away. Proceeds are also allocated across asset classes, so goodwill is typically capital gain while consulting or non-compete pay is ordinary income.
Conversions must be completed by December 31 to count for that tax year; there is no prior-year lookback the way there is for contributions (Source: consistent with IRS Pub 590-B, tax-year reporting on Form 8606).
Bracket-filling: how much of a dentist’s IRA to convert each year
Bracket-filling means converting only enough to fill the top of your current bracket without spilling into the next. Rather than convert a whole IRA in one year at top rates, a dentist converts a slice each year across the low-income windows. Conversions carry no dollar cap and no income limit, so the only real constraint is the rate you accept (Source: IRS Pub 590-A, 2026).
The table below is illustrative only. It shows a hypothetical married dentist couple in a post-sale gap year converting enough to fill through an assumed bracket ceiling. Rates and thresholds are assumed for teaching, not a projection or guarantee. Federal thresholds change annually, so your real bracket room must be calculated for your year and filing status.
| Gap-year scenario (illustrative) | Convert nothing | Bracket-fill conversion |
|---|---|---|
| Ordinary income before conversion | $40,000 | $40,000 |
| Roth conversion this year | $0 | $150,000 |
| Where the room comes from | Lower brackets left unused | Fills to assumed top of a mid bracket |
| Conversion tax | $0 | Paid from taxable savings, not the IRA |
| Pre-tax moved to tax-free | $0 this year | $150,000 now growing tax-free |
| Effect on future RMDs | Larger RMDs at 73 or 75 | Smaller RMDs, less bracket pressure |
Two rules protect the strategy. The conversion tax is paid from taxable, non-retirement funds so the full amount keeps compounding inside the Roth. And the thresholds a conversion can trip are worth watching: it adds to MAGI and can raise Medicare IRMAA surcharges two years later, add net investment income tax, or cut Affordable Care Act premium credits for someone who retired early on marketplace coverage. Our how much to convert and IRMAA 2026 pages cover sizing.
Rothology® Premier Roth Conversion
A flat-fee, fiduciary Roth conversion planning service: multi-year conversion plan, tax projections, and annual reviews. Educational conversation first; no products sold.
Dentist retirement tax planning strategies for the pre-RMD gap
The years between practice exit and the start of RMDs are a valuable planning window for a dentist: income is low and every dollar converted at a low rate never becomes a taxed RMD later. With RMDs beginning at 73 or 75 depending on birth year, a dentist who retires in their early sixties may have a decade of these gap years (Source: SECURE 2.0 sec 107; IRS RMD FAQs, 2026).
A Roth IRA has no required minimum distributions during the owner’s life, and since 2024 neither do designated Roth accounts inside a 401(k) or 403(b) (Source: SECURE 2.0 sec 325, 2026). Every dollar converted in the gap years stops generating a forced taxable withdrawal later. Owners with a defined-benefit design should note the 2026 section 415(b) benefit ceiling of $290,000 and the 401(a)(17) compensation limit of $360,000, which shape how large a cash balance plan balance builds before conversions enter the exit plan (Source: IRS Notice 2025-67, 2026).
Frequently asked questions
Can dentists contribute directly to a Roth IRA or is a backdoor Roth required?
It depends on income. A dentist whose 2026 MAGI tops $168,000 single or $252,000 married filing jointly cannot contribute directly and uses the backdoor route (Source: IRS IR-2025-111, 2026). Between the floors of $153,000 and $242,000 a partial contribution is allowed. Most owner-dentists sit above the ceiling.
Should I do a Roth conversion the year I sell my dental practice?
Usually not in the sale year itself, because sale proceeds push your income and marginal rate up, raising the tax on anything converted. The stronger window is often the following year, once production income has stopped and income falls into a valley before RMDs begin. An installment sale or earnout can delay that valley.
How does the pro-rata rule affect my backdoor Roth if I already have a SEP IRA?
The rule pools all your traditional, SEP, and SIMPLE IRA balances, so a legacy SEP makes most of any conversion taxable rather than just the nondeductible dollars. With a $200,000 SEP and a $7,500 contribution, roughly 96 percent would be taxable. Rolling the SEP into a 401(k) before December 31 removes it.
How much tax will I owe when I convert my traditional IRA to a Roth?
The converted pre-tax amount is taxed as ordinary income in the year the funds move, at your marginal rate that year (Source: IRS Pub 590-B, 2026). There is no separate conversion tax and no dollar or income cap. The bill depends on the amount, your other income, and filing status, which is why timing controls the cost.
Is a Roth conversion worth it for a dentist already in the top tax bracket?
It can be, even at a top rate, when a large pre-tax balance would otherwise drive large RMDs that keep you in a high bracket into your seventies. Converting during a temporary low-income window, rather than at peak production, is what makes the math work. It depends on projected retirement income, state of residence, and paying the tax from taxable funds.
Do I have to take RMDs from a Roth IRA, and how does that help my retirement?
No. A Roth IRA has no required minimum distributions during the owner’s lifetime, and since 2024 designated Roth accounts in a 401(k) or 403(b) also have none (Source: SECURE 2.0 sec 325, 2026). For a dentist, converted dollars never become forced taxable withdrawals, do not add to IRMAA-relevant income, and can pass to heirs tax-free.
Roth conversion for dentists: how Rothology builds your multi-year plan
Rothology Premier Roth Conversion is a flat-fee, fiduciary planning service. For a dentist, the work starts by mapping your income arc: peak production years, the structure and expected year of any practice sale or DSO buyout, and the low-income gap years before RMDs and Medicare. We identify legacy SEP or SIMPLE IRA balances that trip the pro-rata rule and sequence the cleanup before any conversion.
From there the engagement produces a multi-year conversion plan with year-by-year tax projections, bracket-fill sizing, and checks against IRMAA, net investment income tax, and Affordable Care Act thresholds where they apply. We review the plan annually as your income and sale timeline change. We sell no products and earn no commissions. Typical clients hold $750,000 or more in pre-tax retirement assets. Our Form ADV is available on request.
Sources
- IRS IR-2025-111 (November 13, 2025): 2026 IRA and Roth IRA limits, MAGI phase-outs, and traditional IRA deduction phase-outs.
- IRS Notice 2025-67: 2026 section 415(c) $72,000 total contribution limit, section 415(b) $290,000 benefit limit, section 401(a)(17) $360,000 compensation limit, and QCD $111,000.
- IRS COLA table and IR-2025-111: 2026 401(k), 403(b), 457, and TSP elective deferral $24,500 and catch-up amounts ($8,000 age 50+, $11,250 ages 60 to 63).
- SECURE 2.0 Act, sec 107 and IRS RMD FAQs: RMD beginning age 73 (born 1951 to 1959) and 75 (born 1960 or later).
- SECURE 2.0 Act, sec 325: elimination of lifetime RMDs on designated Roth 401(k)/403(b) accounts, effective 2024.
- SECURE 2.0 Act, sec 603; IRC 414(v)(7); Treasury and IRS final regulations: mandatory Roth catch-up for high earners above the $145,000 (indexed) FICA-wage threshold.
- IRS Publication 590-A and 590-B; IRS IRA FAQs; Form 8606 instructions: conversion mechanics, ordinary-income treatment, no income cap, and irreversibility of conversions since 2018.