Roth Conversions: The Tax Questions to Ask First

Tax year 2026  ·  Reviewed October 7, 2026  ·  By Nazim Lokhandwala

How a conversion is taxed

• The converted amount is added to your taxable income for the year, except any portion that is a return of money you already paid tax on. [1]
• The 10% early-withdrawal tax generally does not apply to the conversion itself. [1]
• There is no income limit on who can convert. [2]
• A conversion cannot be undone. Conversions made after 2017 cannot be recharacterized. [3]

The pro-rata rule

If you have both pre-tax and after-tax money in traditional IRAs, you cannot pick the after-tax dollars to convert. The IRS treats all your traditional, SEP, and SIMPLE IRAs as one pot, measured on December 31, and taxes each conversion in proportion. [4, 5]

You report this on Form 8606. [4]

If you also have required withdrawals

The first dollars you withdraw in a required-withdrawal year count as your required amount, and that part cannot be converted. Take the required withdrawal first, then convert only what is left over. Putting a required amount into a Roth by mistake creates an excess contribution, which has its own penalty. [1]

Two five-year clocks

[6, 7]

The ripple effects most people miss

The converted amount raises your adjusted gross income for the year. That can touch several other parts of your finances:

• Medicare premiums. Medicare looks at your income from two years earlier. A 2026 conversion can raise your 2028 premiums if it crosses an income threshold. The thresholds are cliffs: one dollar over moves you up a whole tier. See our Medicare guide. [8]
• Tax on Social Security. More income can make more of your benefits taxable. See our Social Security guide. [9]
• The senior deduction. The 2025 to 2028 extra deduction of $6,000 per person age 65 or older starts to phase out when income passes $75,000 (single) or $150,000 (joint). [10]
• Marketplace health insurance credits. If you buy coverage through the Marketplace before Medicare, income affects the credit. Ask your tax professional about the current rules.

2026 tax brackets for context

The 2026 standard deduction is $16,100 for single filers and $32,200 for married filing jointly. A conversion stacks on top of your other taxable income, so look at where it would land, not just your starting bracket. [11]

Paying the tax

Withholding tax out of the converted amount shrinks what lands in the Roth and, if you are under 59½, can bring the 10% tax into play. Paying the tax from money outside the account keeps the full amount working in the Roth. You may also owe estimated tax payments during the year. Generally, you avoid an underpayment penalty by paying at least 90% of this year's tax or 100% of last year's, which rises to 110% if last year's adjusted gross income was over $150,000. [12]

Questions worth asking before you convert

• What is my tax rate this year compared with what I expect later?
• Do I have after-tax money in any IRA that the pro-rata rule would pull in?
• Can I pay the tax from outside the retirement account?
• Will the extra income push me over a Medicare or Social Security tax threshold?
• Does converting a smaller amount each year work better than one large amount?
• Do I have a required withdrawal to take first this year?

Plan a conversation

General education, not individualized investment, tax, or legal advice. Discuss tax decisions with your tax professional, and recheck annual limits before using this page for another tax year.