Roth Conversion Calculator

• Calculates the federal tax on a conversion using the published bracket tables, not a flat assumed rate.
• Shows exactly how much you could convert to fill your current bracket without spilling into the next one.
• Compares converting now against leaving the money in a traditional IRA, including the side account if you pay the tax from savings.
• States plainly what it does not include — state tax, IRMAA and ACA credits — because each can exceed the federal cost.

How to use this calculator

Enter the ordinary income you expect this year before converting anything — wages, pensions, taxable Social Security, interest and rental income, but not long-term capital gains. Then enter the amount you are thinking of converting.

The headline figure is the federal tax the conversion adds. The more useful number is usually the one beneath it: the room left in your current bracket. Converting exactly that much keeps every converted dollar at your current marginal rate, which is the standard way people approach this.

The advanced fields set the comparison between converting and not converting — how long the money has to grow, at what return, and the tax rate you expect to face when you eventually withdraw it. That last one is the assumption everything turns on and the one nobody can know.

How the tax is calculated

A conversion is taxed as ordinary income in the year it happens. The calculation is simply the difference between two tax bills:

Taxable income before = ordinary income − deduction
Taxable income after  = ordinary income + conversion − deduction

Conversion tax = tax(after) − tax(before)

Because the bracket structure is progressive, the tax is not the conversion multiplied by your marginal rate. The first dollars converted are taxed at whatever bracket you are currently in; later dollars may cross into a higher one. That is why the calculator reports an effective rate on the whole converted amount as well as the marginal rate before and after.

The comparison against not converting grows both sides at the same return. Nothing about investment performance favours one over the other — a Roth and a traditional IRA holding identical investments grow identically. The only difference is when the tax is paid and at what rate.

A worked example

A married couple filing jointly expect $95,000 of ordinary income and take the standard deduction. That leaves $62,800 of taxable income, comfortably inside the 12% bracket, with about $38,000 of room before the 22% bracket begins.

Converting $38,000 costs 12% of it — around $4,560 — and every converted dollar stays at 12%. Converting $50,000 instead costs about $7,200, because the last $12,000 is taxed at 22%. The effective rate on the whole conversion rises from 12% to 14.4%.

Neither answer is automatically right. The second one is worth it if you expect to face more than 22% later; the first is the cautious choice if you do not. What the calculator does is stop the decision being made blind.

Why people convert in specific years

Conversions cluster in particular years for a reason. The window between retiring and starting Social Security or required minimum distributions is often the lowest-income stretch of a person's adult life, and therefore the cheapest time to move money out of a traditional IRA. A year with an unusually low income — a sabbatical, a business loss, a career break — does the same thing.

The opposite is also true. Converting in a peak earning year, or in a year with a large capital gain, stacks voluntary income on top of income you could not avoid, and does it at your highest rate.

Nothing requires a balance to move in one go. Converting a slice each year, sized to fill a bracket, is the normal approach precisely because tax is marginal.

Assumptions and limitations

• Federal tax only. Most states tax a conversion as ordinary income. A few do not tax retirement income at all. Depending on where you live — and where you plan to live when you withdraw — this can change the answer entirely.
• IRMAA is not modelled. A conversion raises modified AGI, and crossing an IRMAA threshold raises Medicare Part B and D premiums about two years later. The surcharge is a cliff rather than a gradient: one dollar over a threshold costs the full step.
• ACA premium credits are not modelled. For anyone buying insurance through the marketplace before Medicare age, extra income can withdraw premium tax credits worth thousands.
• One year at a time. Multi-year conversion ladders, and their interaction with future required minimum distributions, are not projected here.
• No penalty modelling. The five-year rule on converted amounts and the age 59½ rules are described in the notices but not calculated.

Common mistakes

Assuming the conversion is taxed at your marginal rate. It is taxed progressively from where your income already sits. A large conversion has an effective rate somewhere between your current bracket and the top bracket it reaches.

Paying the tax out of the converted money. It shrinks the balance that gets to grow tax-free and, under 59½, the withheld amount is generally treated as a distribution with a penalty attached. Conversions work best when the tax comes from taxable savings.

Forgetting the pro-rata rule. If you hold any pre-tax IRA money — including in a SEP or SIMPLE — you cannot choose to convert only after-tax dollars. The conversion is treated as coming proportionally from all your IRA balances.

Treating it as reversible. Recharacterising a conversion has not been permitted since 2018. An amount converted in a year that turns out badly stays converted.

Frequently asked questions