Roth conversion strategy 2026: when to convert and how much
Roth conversions are governed by 26 U.S.C. § 408A(d)(3) and the procedures in IRS Publication 590-A "Converting From Any Traditional IRA Into a Roth IRA". The case changed in July 2025 when OBBBA made the TCJA brackets permanent. The "convert before sunset" urgency is gone. The bracket-filling case under the 2026 brackets, the RMD-avoidance case under SECURE 2.0 § 107, and the estate-planning case under inherited-IRA rules in IRS Publication 590-B are just as strong as ever. Last verified 2026-05-27.
2026 brackets: room to convert
Bracket-filling means converting just enough Traditional IRA money to use up the cheap brackets. If your taxable income is $50,000 (single), you have roughly $53,350 of headroom in the 22% bracket before hitting 24%. Convert that and you pay 22% now to avoid 24%+ on future RMDs.
| Bracket | From (single) | To | Width |
|---|---|---|---|
| 10% | $0 | $11,925 | $11,925 |
| 12% | $11,925 | $48,475 | $36,550 |
| 22% | $48,475 | $103,350 | $54,875 |
| 24% | $103,350 | $197,300 | $93,950 |
| 32% | $197,300 | $250,525 | $53,225 |
| 35% | $250,525 | $626,350 | $375,825 |
| 37% | $626,350 | no upper bound | - |
2026 single brackets, OBBBA permanent rates. MFJ thresholds are roughly double except in the 35% bracket. Convert up to the top of your current bracket each year.
IRMAA cliffs: why one big conversion is dangerous
Once you are 65 and on Medicare, conversion-driven MAGI spikes can trigger Income-Related Monthly Adjustment Amount (IRMAA) surcharges. There is a two-year lookback: 2026 IRMAA uses your 2024 MAGI. Cliff structure means crossing a tier by $1 costs the full surcharge.
| MAGI threshold (single / MFJ) | Part B surcharge | Part D surcharge | Tier |
|---|---|---|---|
| $103,000 / $206,000 | +$0 | +$0 | Standard premium |
| $129,000 / $258,000 | +$70.00 | +$13.70 | Tier 1 |
| $161,000 / $322,000 | +$175.00 | +$35.30 | Tier 2 |
| $193,000 / $386,000 | +$280.00 | +$56.90 | Tier 3 |
| $500,000 / $750,000 | +$385.00 | +$78.60 | Tier 4 |
Approximate 2026 figures. Surcharges are per person, per month, on top of the standard premiums. Two-tier crossing for a couple can run $4,000+ per year.
When to convert
Career break or sabbatical
Low or zero earned income leaves room in low brackets to convert at 12% or 22%.
Early retirement before Social Security
Years between retirement and age 70 with no SS, no pension, no RMDs are the conversion sweet spot.
Year of large deductions
Big charitable gift, business loss, or medical expense year shrinks taxable income and opens bracket room.
Market downturn
Convert at depressed values; future recovery happens inside the Roth where it stays tax-free.
Pre-RMD years (60s)
Reduce the Traditional balance before age 73 forced withdrawals trigger higher brackets and IRMAA.
Estate planning
Pre-pay your heirs' income tax at your bracket if your bracket is lower than theirs will be.
Multi-year vs lump-sum conversion
Converting $500,000 in a single year (single filer) lands most of it in the 32% and 35% brackets, plus an IRMAA cliff hit. Spreading the same conversion across 8 years at about $62,500 each, layered onto $50,000 of other taxable income, keeps you in the 22% and 24% brackets:
$500,000 conversion in year 1
Federal tax: ~$153,000
Plus 2 years of top-tier IRMAA
$62,500/yr for 8 years
Federal tax: ~$117,000 total
Stays in 22-24% bracket, IRMAA-aware
Illustrative figures using 2026 single brackets. Tax saving depends on your other taxable income; the principle holds for most retirees.
Pro-rata rule
Per 26 U.S.C. § 408(d)(2) and IRS Publication 590-A "Are Distributions Taxable?", if you have any pre-tax money in a Traditional, SEP, or SIMPLE IRA, the IRS treats all your IRA money as one pool when you convert. The taxable portion of any conversion is proportional to your pre-tax balance, computed on IRS Form 8606 Part II. Workaround per IRS Publication 590-A: roll the pre-tax IRA money into a workplace 401(k) before converting (401(k) balances are not included in the pro-rata calculation). See backdoor Roth for the full pro-rata math.
Tax filing
- IRS Form 1099-R from your custodian reports the conversion amount (Box 2a taxable amount, Box 7 distribution code G or 2).
- IRS Form 8606 Part II tracks the conversion plus any non-deductible basis (per 26 U.S.C. § 408(o)(4)) so the basis portion is not taxed twice. Required for any year you have basis in a Traditional IRA. $50 penalty per missing year under 26 U.S.C. § 6693(b).
- Estimated tax may be needed per 26 U.S.C. § 6654: conversions can create an underpayment penalty if your withholding does not cover the new tax bill. Pay quarterly via IRS Form 1040-ES or increase W-2 withholding for the year.