Federal rules for readers across the U.S.
Roth Conversion Taxes, Explained
Educational information only, not personalized tax, legal, or investment advice. Christian is a licensed insurance agent (NC Life & Health), not a CPA or registered investment adviser. Discuss your own situation with a qualified professional.
How the tax works
The amount you convert is added to your taxable income for the year, and taxed at your ordinary rates, from 10 to 37 percent in 2026. There is no 10 percent early withdrawal penalty on the conversion itself, even if you are under 59 and a half. But if you withdraw converted money within five years and you are under 59 and a half, the 10 percent penalty can apply to that withdrawal. After-tax basis in the account is not taxed again, which is where the pro-rata rule comes in.
The pro-rata rule
If your IRA holds both pre-tax and after-tax money, you cannot convert only the after-tax part. Each conversion is treated as a proportional mix of the two. The IRS looks at all your traditional, SEP, and SIMPLE IRAs together when it works out the mix. That surprises people who made nondeductible contributions expecting to convert them tax-free. Form 8606 is where the basis is tracked, so keep it current.
The IRMAA and Social Security ripple
A conversion raises your modified adjusted gross income, and that number is what sets your Medicare premiums two years later. A conversion that pushes income over $109,000 single or $218,000 joint can add the first IRMAA tier, $81.20 a month on Part B in 2026, plus $14.50 on Part D. It can also make more of your Social Security taxable. A conversion in a low-income year, such as the years between retiring and starting Social Security, usually costs less tax than the same conversion in a high-income year.
What to check before converting
Your required minimum distribution for the year has to come out before any conversion, and the RMD itself cannot be converted. There is no income limit on conversions and no age limit, and a conversion cannot be undone once it is done. This is educational information, not tax advice. Run the numbers with a tax professional, including the IRMAA effect two years out, before converting.
| The money | How it is taxed |
|---|---|
| Pre-tax IRA or 401(k) dollars | Ordinary income in the year you convert |
| After-tax basis | Not taxed again, but the pro-rata rule mixes it with pre-tax money |
| Earnings after the conversion | Tax-free if the withdrawal is qualified |
| The required minimum distribution | Must come out first and cannot be converted |
Your records checklist
- Take your RMD for the year before converting anything.
- Estimate the tax on the converted amount at your marginal rate.
- Check whether the conversion pushes your income over an IRMAA threshold.
- Track your after-tax basis on Form 8606.
- Ask a tax professional to model the conversion before you do it.
Common questions
- Is there an income limit on Roth conversions?
- No. Anyone can convert, whatever their income. The income limits apply to Roth IRA contributions, not conversions.
- Can I undo a Roth conversion?
- No. Recharacterization of conversions ended with the 2017 tax law. Once a conversion is done, it stays done.
- Does a conversion avoid the 10 percent early withdrawal penalty?
- The conversion itself has no 10 percent penalty. But withdrawing converted money within five years before age 59 and a half can trigger the penalty on that withdrawal.
Sources and current instructions
Check the tax year and any later updates before acting. These are the primary sources used for this guide.