{
  "id": "roth-conversion",
  "version": "5205adfc0fa8",
  "status": "published",
  "name": "Roth Conversion Calculator",
  "question": "Should I make a Roth conversion?",
  "summary": "Estimates the 2026 tax on converting a traditional IRA or 401(k) to a Roth, and compares the Roth with keeping the traditional account and paying tax on withdrawal later, with the break-even future tax rate.",
  "category": "finance",
  "subcategory": "retirement",
  "url": "https://www.acalculator.org/finance/roth-conversion-calculator",
  "markdown": "https://www.acalculator.org/finance/roth-conversion-calculator.md",
  "kind": "schedule",
  "method": "Tax now = 2026 federal tax with the conversion − without + state rate × amount; convert: Roth = (amount, or amount − tax if paid from the IRA) × (1 + r)ⁿ; keep: amount × (1 + r)ⁿ × (1 − future rate) + tax kept outside × (1 + r × (1 − outside tax))ⁿ.",
  "assumptions": [
    "Federal tax for tax year 2026 with the standard deduction and brackets; all other income is ordinary income.",
    "Both accounts earn the same steady return. Roth withdrawals are qualified (after 59½ and five years) and tax free.",
    "Paying the tax from the IRA before 59½ can add the 10% early withdrawal tax on that part; it is not included.",
    "A conversion raises this year’s income, which can raise Medicare premiums (IRMAA), make more Social Security taxable, and reduce credits; none of these are included.",
    "The future tax rate is your estimate; nobody knows future tax law."
  ],
  "inputs": {
    "$schema": "https://json-schema.org/draft/2020-12/schema",
    "type": "object",
    "properties": {
      "amount": {
        "title": "Amount to convert",
        "description": "The pre-tax amount moved from a traditional IRA or 401(k) to a Roth this year.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 1,
        "maximum": 10000000000
      },
      "income": {
        "title": "Other taxable income",
        "description": "Your other taxable income this year before deductions.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 10000000000
      },
      "status": {
        "title": "Filing status",
        "description": "Your federal filing status.",
        "type": "string",
        "enum": [
          "single",
          "mfj",
          "hoh",
          "mfs"
        ]
      },
      "state": {
        "title": "State tax rate now",
        "description": "Your state income tax rate on the conversion (0 where there is none).",
        "type": "number",
        "x-unit": "percent",
        "minimum": 0,
        "maximum": 20
      },
      "future": {
        "title": "Tax rate when you withdraw",
        "description": "Your expected combined federal and state tax rate on traditional withdrawals in retirement.",
        "type": "number",
        "x-unit": "percent",
        "minimum": 0,
        "maximum": 60
      },
      "years": {
        "title": "Years until you withdraw",
        "description": "How many years the money grows before you take it out.",
        "type": "integer",
        "minimum": 1,
        "maximum": 70
      },
      "growth": {
        "title": "Yearly return",
        "description": "The yearly return on the investments, the same in both accounts.",
        "type": "number",
        "x-unit": "percent",
        "minimum": -20,
        "maximum": 30
      },
      "payFrom": {
        "title": "Pay the conversion tax from",
        "description": "Savings outside the IRA (the whole amount goes into the Roth), or the IRA itself (less goes into the Roth).",
        "type": "string",
        "enum": [
          "outside",
          "ira"
        ]
      },
      "sideTax": {
        "title": "Tax on outside investment returns",
        "description": "If you do not convert, the tax money stays invested outside; the tax rate on its yearly returns.",
        "type": "number",
        "x-unit": "percent",
        "minimum": 0,
        "maximum": 60
      }
    }
  },
  "outputs": {
    "advantage": {
      "label": "Gain from converting",
      "description": "After-tax value if you convert minus after-tax value if you keep the traditional account; below 0, keeping wins.",
      "format": "money"
    },
    "verdict": {
      "label": "Result",
      "description": "Which choice comes out ahead after tax at the end, and by how much.",
      "format": "text"
    },
    "taxNow": {
      "label": "Tax on the conversion now",
      "description": "Federal tax the conversion adds plus state tax.",
      "format": "money"
    },
    "federalTax": {
      "label": "Federal tax on it",
      "description": "Your 2026 federal tax with the conversion minus without it.",
      "format": "money"
    },
    "effectiveRate": {
      "label": "Tax rate on the conversion",
      "description": "The tax on the conversion divided by the amount converted.",
      "format": "percent"
    },
    "marginalRate": {
      "label": "Top federal bracket",
      "description": "The federal bracket of the last dollar converted.",
      "format": "percent"
    },
    "rothValue": {
      "label": "Roth at the end",
      "description": "The Roth after the years of growth, tax free.",
      "format": "money"
    },
    "keepValue": {
      "label": "Keep: after tax at the end",
      "description": "The traditional account after the future tax, plus any outside money kept.",
      "format": "money"
    },
    "breakEvenRate": {
      "label": "Break-even future tax rate",
      "description": "The tax rate on withdrawals at which converting and keeping come out the same; above it, converting wins.",
      "format": "percent"
    }
  },
  "defaultAnswer": {
    "inputs": {
      "amount": 50000,
      "income": 80000,
      "status": "mfj",
      "state": 0,
      "future": 22,
      "years": 20,
      "growth": 6,
      "payFrom": "outside",
      "sideTax": 15
    },
    "outputs": {
      "advantage": 19052.710653048038,
      "verdict": "converting comes out ahead by $19,052.71",
      "taxNow": 6000,
      "federalTax": 6000,
      "effectiveRate": 12,
      "marginalRate": 12,
      "rothValue": 160356.7736106424,
      "keepValue": 141304.06295759437,
      "breakEvenRate": 10.118549516773545
    },
    "text": "Converting $50,000.00 costs $6,000.00 in tax now; after 20 years, converting comes out ahead by $19,052.71."
  },
  "examples": [
    {
      "given": {
        "amount": 50000,
        "income": 80000,
        "status": "mfj",
        "state": 0,
        "future": 22,
        "years": 20,
        "growth": 6,
        "payFrom": "ira"
      },
      "expect": {
        "federalTax": 6000,
        "taxNow": 6000,
        "breakEvenRate": 12,
        "advantage": 16035.677361064227
      },
      "source": "2026 joint brackets (Rev. Proc. 2025-32) and Tax Table method; hand calculation in content.mdx"
    },
    {
      "given": {
        "amount": 100000,
        "income": 0,
        "status": "single",
        "state": 5,
        "future": 24,
        "years": 10,
        "growth": 0,
        "payFrom": "outside",
        "sideTax": 15
      },
      "expect": {
        "federalTax": 13176,
        "taxNow": 18176,
        "rothValue": 100000,
        "keepValue": 94176,
        "advantage": 5824,
        "breakEvenRate": 18.176
      },
      "source": "2026 single brackets and Tax Table method; hand calculation in content.mdx (no growth)"
    },
    {
      "given": {
        "amount": 10000,
        "income": 0,
        "status": "mfj",
        "state": 0,
        "future": 12,
        "years": 30,
        "growth": 7,
        "payFrom": "ira"
      },
      "expect": {
        "taxNow": 0,
        "advantage": 9134.706051194444,
        "breakEvenRate": 0
      },
      "source": "hand calculation in content.mdx: $10,000 is below the $32,200 joint standard deduction, so no tax; 10,000 × 1.07³⁰ × 12%"
    }
  ],
  "sources": [
    "Internal Revenue Service, Publication 590-B (2025), conversions and the recharacterization rule: https://www.irs.gov/publications/p590b",
    "Internal Revenue Service, Publication 590-A, Roth IRA conversions: https://www.irs.gov/publications/p590a",
    "Internal Revenue Service, Rev. Proc. 2025-32 (2026 brackets and standard deduction): https://www.irs.gov/irb/2025-45_IRB"
  ],
  "related": [
    "401k-withdrawal-tax",
    "rmd",
    "roth-ira"
  ],
  "changelog": []
}