IRA to Roth Conversion Tax Calculator: Pro-Rata, IRMAA, Strategies

Converting a traditional IRA to a Roth IRA creates a taxable event: the pre-tax portion of what you move is added to your ordinary income for the year and taxed at your regular rates. There is no separate “conversion tax” and no income limit on who can do it. What you actually owe on an IRA to Roth conversion depends on three things — your other income for the year, how much you convert, and whether any of the money in your traditional IRA was contributed with after-tax dollars.

How the Conversion Is Taxed

Federal law treats the conversion as a distribution from your traditional IRA that you roll into a Roth. Under 26 U.S.C. § 408A(d)(3)(A), any amount that would have been taxable as a normal distribution is included in your gross income for the year you convert.¹ That income is taxed at ordinary rates, the same rates that apply to your wages.

If every dollar in your traditional IRA came from deductible contributions and growth, the entire conversion is taxable. If you made nondeductible contributions over the years, part of the conversion is tax-free because you already paid tax on that money. How the split is calculated is the pro-rata rule, covered below.

One important carve-out: the same statute exempts conversions from the 10% early distribution penalty that normally applies to withdrawals before age 59½.¹ You still owe income tax on the taxable portion, but the 10% add-on does not hit the converted amount itself.

Running the Numbers Against 2026 Brackets

Conversion income stacks on top of what you already earn, so the rate you pay depends on where your existing income leaves you. The 2026 federal ordinary-income brackets are:

10%: up to $12,400 (single) or $24,800 (married filing jointly)
12%: $12,401–$50,400 (single) or $24,801–$100,800 (joint)
22%: $50,401–$105,700 (single) or $100,801–$211,400 (joint)
24%: $105,701–$201,775 (single) or $211,401–$403,550 (joint)
32%: $201,776–$256,225 (single) or $403,551–$512,450 (joint)
35%: $256,226–$640,600 (single) or $512,451–$768,700 (joint)
37%: above $640,600 (single) or above $768,700 (joint)

These are marginal rates. Only the income inside each bracket is taxed at that bracket’s rate.

Take a single filer with $80,000 of taxable income who converts $30,000. The first $25,700 of conversion income fills the rest of the 22% bracket (which ends at $105,700), and the remaining $4,300 spills into the 24% bracket. Federal tax on the conversion works out to roughly $6,686, not a flat 22% or 24% on the whole amount.

The bracket-stacking effect is where most of the planning value sits. Converting just enough to fill your current bracket keeps the blended rate down. A large single-year conversion can push a big slice into 32% or 35%, which may cost more than simply leaving the money in the traditional IRA and paying tax later at retirement rates.

The Pro-Rata Rule and After-Tax Contributions

If you have ever made nondeductible contributions to a traditional IRA, you might expect to convert only those after-tax dollars and owe nothing. The IRS does not allow that. Under 26 U.S.C. § 408(d)(2), all of your traditional, SEP, and SIMPLE IRA balances are treated as a single combined account for any distribution, including a conversion.² Every dollar you convert carries a proportional mix of pre-tax and after-tax money.

The formula: divide your total nondeductible contributions (your basis) by the combined year-end balance of all traditional, SEP, and SIMPLE IRAs. That percentage is tax-free; the rest is taxable.

Say you have $20,000 of basis and $100,000 total across all your IRAs. Twenty percent of anything you convert is tax-free. Convert $10,000 and $2,000 comes out tax-free while $8,000 gets added to your taxable income. Choosing to convert from a specific account that only holds after-tax money does not change the outcome; the IRS looks at the aggregate.

The calculation uses your total IRA balance as of December 31 of the conversion year, not the date of the conversion. A rollover from an old employer plan into a traditional IRA in November counts against a conversion you did in March. Employer plans — 401(k)s, 403(b)s, 457(b)s — are excluded from the aggregation, which opens up a workaround.

Clearing the Pro-Rata Problem

Because employer plans sit outside the IRA aggregation, you can move your pre-tax IRA money into your current employer’s 401(k) if the plan accepts incoming rollovers. That leaves only your nondeductible basis in the IRA. Convert what’s left and the tax bill is small or zero.

Timing is what makes or breaks this. Both the rollover into the 401(k) and the Roth conversion have to be finished before December 31. Any pre-tax dollar or earnings sitting in any traditional IRA on that date triggers the pro-rata rule. This is the mechanism behind the “backdoor Roth” strategy that high-income earners use to get money into a Roth despite the direct-contribution income limits.

Tracking Basis on Form 8606

Form 8606 is how you document nondeductible contributions and compute the taxable portion of a conversion. Line 1 captures nondeductible contributions for the current year. Line 2 carries forward your cumulative basis from prior years.³ If you have never filed one before, Line 2 is zero.

Part I walks through the pro-rata math and Part II reports the conversion, with the taxable amount flowing to Form 1040, Line 4b.³ Keep every 8606 you file. Basis carries year to year, and if you can’t document it, the IRS treats your whole IRA as pre-tax and taxes the full conversion.

Costs That Don’t Show Up in a Bracket Estimate

The federal marginal-rate calculation is only part of what a conversion costs. Three add-ons catch people off guard.

State Income Tax

Most states with an income tax treat conversion income the same way the federal government does. Rates run from roughly 2% to over 13%. About a dozen states have no personal income tax or specifically exempt retirement income. If you’re planning a large conversion and expect to move from a high-tax state to a no-tax state, delaying until after the move can save real money.

Net Investment Income Tax

The 3.8% Net Investment Income Tax applies to investment income once your modified adjusted gross income exceeds $200,000 (single) or $250,000 (joint).⁴ The conversion income itself is not investment income for NIIT purposes, so the 3.8% doesn’t hit the converted amount directly. But conversion income raises your MAGI, which can push existing dividends, capital gains, or rental income above the threshold. A filer with $180,000 in wages and $30,000 in dividends who converts $50,000 lands at $260,000 MAGI, and the 3.8% starts biting the dividends that used to sit under the line.

Medicare IRMAA Surcharges

If you’re 63 or older, conversion income can push up your Medicare premiums two years later. Medicare uses a two-year lookback, so 2026 premiums are based on the 2024 return. The standard Part B premium for 2026 is $202.90 a month, with income-related surcharges kicking in above $109,000 (single) or $218,000 (joint).⁵

At the first surcharge tier ($109,001–$137,000 single), Part B goes to $284.10. Higher tiers climb steeply, reaching $689.90 at income above $500,000. Part D carries parallel surcharges. A single large conversion can put you in a higher IRMAA tier for two years running and add thousands to what you pay for Medicare. This is one of the easiest costs to miss in conversion planning, especially for people converting shortly before or after enrolling.

Paying the Tax Without Shrinking the Roth

The most consequential tactical choice is how you pay the tax. Cover it from a bank account or other non-retirement money, not by withholding from the IRA. If your custodian withholds 22% on a $100,000 conversion, only $78,000 lands in the Roth and the $22,000 withheld counts as a distribution. Under 59½, that withheld amount also gets hit with the 10% early withdrawal penalty. Even past 59½, that money loses every future year of tax-free growth. Paying with outside cash preserves the full converted balance inside the Roth.

Estimated Payments and Safe Harbor

A midyear conversion can create an underpayment penalty if you haven’t adjusted withholding or made estimated payments. The IRS charges a penalty when you owe more than $1,000 at filing and haven’t paid at least 90% of your current-year tax through withholding and estimates. The safe-harbor alternative is paying at least 100% of last year’s total tax, or 110% if your prior AGI exceeded $150,000.⁶

A useful quirk: federal withholding from wages or retirement distributions counts as paid evenly across the year regardless of when it actually happened. If you realize in December that a conversion has created a big shortfall, increasing withholding on final paychecks or taking a small IRA distribution with 100% federal withholding can retroactively cure the quarterly shortfalls. Estimated payments are locked to specific due dates and don’t offer that flexibility.

The deadline itself is firm. Conversions have to be completed by December 31 of the year you want the income taxed in. Unlike IRA contributions, there is no April grace period.

Conversions Are Permanent

Before 2018 you could recharacterize a conversion and effectively undo it. The Tax Cuts and Jobs Act ended that. Under 26 U.S.C. § 408A(d)(6)(B)(iii), a conversion to a Roth IRA cannot be recharacterized.¹ Once the money moves, the tax is locked in whatever happens to the account after. Run the numbers before you convert, not after.

Strategies That Lower the Total Tax

Bracket-Filling in Low-Income Years

The standard playbook is converting just enough each year to fill your current bracket without spilling into the next. Retirees between the day they stop working and the day Social Security or required minimum distributions start often have a stretch of unusually low income. Converting inside that window can move money at 10% or 12% that would otherwise come out at 22% or higher once RMDs begin.

Qualified Charitable Distributions

If you’re 70½ or older and give to charity, a qualified charitable distribution lets you send up to $111,000 a year directly from your IRA to a qualifying charity.⁷ A QCD satisfies your required minimum distribution without adding to AGI. It doesn’t offset conversion income directly, but it keeps AGI lower than taking a normal RMD and donating the cash separately would, which leaves less income stacked underneath a same-year conversion. The combined effect can hold you inside a lower bracket and clear of IRMAA tiers.

Converting From an Employer Plan

You can also convert pre-tax money from a 401(k), 403(b), or similar plan straight to a Roth IRA. The tax treatment is identical: the pre-tax amount is included in gross income for the year. What’s different is that the employer plan balance isn’t part of the IRA aggregation, so it has no effect on the pro-rata calculation for any separate traditional IRA conversion you might do the same year. The same irreversibility rule applies.

The Five-Year Rule If You Might Need the Money Early

The 10% penalty doesn’t apply to the conversion itself, but it can apply if you pull converted money out of the Roth too soon. Under 26 U.S.C. § 408A(d)(3)(F), a withdrawal of converted funds within five tax years of the conversion, taken before age 59½, gets hit with the 10% penalty on the pre-tax portion of that withdrawal.¹

Each conversion runs its own five-year clock, starting January 1 of the conversion year. A conversion in October 2026 starts its clock on January 1, 2026, and ends on January 1, 2031. After 59½ the penalty no longer applies to converted amounts, no matter how recent the conversion. Regular Roth contributions come out first under the IRS ordering rules and are always penalty-free, so those act as a buffer before you touch any converted dollars.

1
Office of the Law Revision Counsel. 26 USC 408A – Roth IRAs
2
Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts
3
Internal Revenue Service. Instructions for Form 8606
4
Office of the Law Revision Counsel. 26 USC 1411 – Imposition of Tax
5
Centers for Medicare and Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles
6
Office of the Law Revision Counsel. 26 USC 6654 – Failure by Individual to Pay Estimated Income Tax
7
Internal Revenue Service. 2026 Amounts Relating to Retirement Plans and IRAs