Roth conversions in plain English
A Roth conversion moves money from a tax-deferred account — a traditional IRA or an old 401(k) — into a Roth IRA. The amount you move is added to your taxable income that year and taxed at ordinary rates. In exchange, the converted money then lives in an account where qualified withdrawals are free of federal income tax under current rules, and where required minimum distributions do not apply during your lifetime. In one sentence: you pay a tax bill you can see now to remove one you cannot see later.
How a conversion actually works
- You choose the amount. There is no income limit on conversions and no requirement to convert everything. Converting in stages, across several years, is common.
- The converted amount is ordinary income. It stacks on top of your wages, Social Security, pension, and everything else on that year's return.
- It cannot be undone. Under current law a conversion is final once made. Size it carefully, with your CPA, before — not after.
- If you are already 73 or older, that year's required minimum distribution comes out first and cannot itself be converted. Conversions and RMDs share a calendar but not a purpose — more in RMDs, explained.
What "filling a bracket" means
Federal tax brackets are steps, not a single rate. Each layer of income is taxed at that layer's rate. So some people size a conversion to use up the space left in their current bracket — no more.
| The picture | The number |
|---|---|
| Taxable income before converting | $80,000 |
| Top of the 12% bracket (2026, MFJ) | $100,800 |
| Room left in the 12% bracket | $20,800 |
Convert $20,800 in that picture and every converted dollar is taxed at 12%. Convert $60,000 instead and a large slice lands in the 22% bracket, which runs to $211,400. Neither choice is wrong — but they are different bills, and the person who should size that number for you is your CPA, working from your actual return.
The side effects people miss
The tax on the conversion is the visible cost. These are the quieter ones a good CPA checks before you convert:
- Medicare premiums look back two years. Medicare's income-related surcharges (IRMAA) are based on your income from two years earlier, and they work on a cliff: one dollar over a threshold triggers that tier's full surcharge. A conversion at 63 can show up in the premiums you pay at 65.
- More of your Social Security can become taxable. Once combined income passes $32,000 for joint filers, up to 50% of benefits can be taxable; past $44,000, up to 85%. (For single filers: $25,000 and $34,000.) Those thresholds have not been adjusted for inflation since 1984, so conversion income crosses them easily.
- A temporary deduction can shrink. The 2025–2028 senior bonus deduction — $6,000 per person 65 and older, $12,000 for a couple where both qualify — phases out at 6 cents per dollar above $75,000 of income for single filers and $150,000 for joint filers. Conversion income counts toward that.
- State taxes have their own opinion. Depending on where you live — and where you might move — state income tax can change the math.
None of these makes conversions a bad idea. They make them a whole-picture idea, which is the reason the CPA sits at the center of this decision.
Who tends to look at this
People with large tax-deferred balances, several years before RMDs begin at 73, cash outside the IRA to pay the tax, and heirs who would otherwise inherit under the 10-year rule — that profile shows up again and again. The other profile is just as real: smaller balances that stay in low brackets even after 73, where converting buys little. Both answers are respectable. What matters is knowing which one you are, on purpose.
Related reading
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