# Roth Conversion Taxes, Explained

> A Roth conversion is taxed as ordinary income in the year you convert. See how it can lift your bracket, raise IRMAA later, and when the 5-year rule applies.

Canonical: https://christianbrinkleync.com/guides/roth-conversion-taxes

## Quick answer

A Roth conversion moves pre-tax money from a traditional IRA or 401(k) into a Roth account, and the converted amount is taxed as ordinary income in the year you convert. It stacks on top of your other income, so it can push you into a higher bracket and raise your Medicare premiums two years later. The conversion itself carries no 10 percent early withdrawal penalty.

## 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.

## What gets taxed in a Roth conversion

| 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 |

## 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.

## Frequently asked 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

- [IRS Topic 451, IRAs](https://www.irs.gov/taxtopics/tc451)
- [IRS: Roth IRAs](https://www.irs.gov/retirement-plans/roth-iras)
- [IRS: RMD FAQs](https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs)

## Related

- [Roth conversion ladder, explained](https://christianbrinkleync.com/guides/roth-conversion-ladder-explained)
- [Backdoor Roth IRA steps](https://christianbrinkleync.com/guides/backdoor-roth-ira-steps)
- [RMDs at 73, explained](https://christianbrinkleync.com/wealth/rmd-explained-73)

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Educational content only, not financial or tax advice. Published by Christian Brinkley, christianbrinkleync.com.