Roth IRA Conversion Calculator

A Roth conversion is a trade about tax rates: pay at a rate you know now, to avoid a rate you do not know later. The size of the outcome depends on the horizon, the return and your basis. The direction depends on how your future marginal rate compares with today's — and, more than most calculators admit, on where the money to pay the tax comes from.

The first thing this page fixes is the taxable amount. A conversion's nontaxable portion cannot be chosen by pointing at the account that holds your after-tax contributions. Form 8606 Part I aggregates your traditional, SEP and SIMPLE IRAs and applies one ratio to the whole conversion, and its denominator is not the balance you started with: line 6 asks for the total value of all those IRAs as of December 31, to which the year's other distributions and the amount converted are added. So the taxable share is computed across everything you hold, and a value you will not know until year end sits in the middle of it.

The second thing it fixes is the comparison. Comparing a Roth balance against an after-tax traditional balance, while ignoring the cash that paid the tax, flatters conversion. This model projects the whole portfolio both ways — the Roth, the traditional assets left behind with their remaining basis, and the outside cash spent on tax — so the two futures are genuinely comparable.

It is an estimate under the assumptions you state, not tax advice and not a completed return. Every rate here is one you supply: Quantus publishes no brackets, computes no marginal rate for you, and models nothing about what a larger income in the conversion year does to the rest of your tax position.

Start with the taxable amount, because it is where most conversion estimates go wrong. On the default figures, $20,000 of basis in a $400,000 IRA makes 5% of a $100,000 conversion nontaxable — $5,000, not the $20,000 you might expect from converting a 'basis' account. The remaining $15,000 of basis stays behind and shelters the assets that were not converted. That is the pro-rata rule doing its work, and it is why a partial conversion never consumes all the basis.

Then read the payment source, which is the switch that most changes the answer. Paying the tax from outside funds moves the whole $100,000 into the Roth and costs you $27,550 of cash that would otherwise have compounded — a $74,503 opportunity cost over twenty years, which the comparison charges against the conversion. Paying it from the IRA instead moves only $72,450 into the Roth, and on these figures flips a $10,739 advantage into a $3,114 cost. Same conversion, opposite conclusion.

The break-even future rate is the number worth remembering: 23.60% here, against a 29% combined rate today. Note that the break-even is not your current rate. Basis, the horizon and the cost of the tax cash all move it, which is exactly why 'convert if you expect higher rates later' is too crude a rule to act on.

Read the partial-conversion table as a shape, not as an instruction. The difference scales almost linearly across it only because this model assumes one flat marginal rate. A real conversion of several hundred thousand dollars would climb through brackets, and this page cannot see that — it has no bracket engine, by design.

Finally, treat the limitations as part of the result. A conversion raises your income for the year, and income-tested thresholds elsewhere in the tax and benefits system can react to that. None of it is modelled here, and for some households it is larger than the figures above.

The taxable amount follows the structure of Form 8606 Part I: one ratio, computed across the aggregated IRAs, applied to the converted amount. The denominator is the year-end value of the remaining IRAs plus the year's other distributions plus the amount converted. Because the December 31 value is not knowable on the conversion date, the calculator defaults to the balance left after the conversion and lets you enter your own figure instead — and reports the ratio both in full and at the three decimal places the form permits.

Both futures are then projected on the whole portfolio at the same return, so the comparison isolates tax treatment rather than investment skill. The gross value at the comparison date is identical either way; every dollar of difference comes from when tax is paid and on what.

The cash that pays the tax is not free. Paid from outside funds, it leaves a taxable account that would otherwise have compounded, and that forgone value is charged against the conversion. Paid from the IRA, less money reaches the Roth, and the cost is already inside the smaller Roth balance rather than charged again.

On the five-year rules, which are two different things and should not be compressed into one. A distribution from a Roth IRA is qualified — and therefore not taxed — only if it satisfies a 5-taxable-year period and one of a set of conditions: reaching age 59½, death, disability, or up to $10,000 of first-home expenses (Publication 590-B, 2025). Separately, for the additional tax on early distributions, a 5-year period applies to each conversion in its own right, so converted amounts withdrawn inside that window can face the additional tax unless an exception applies. This calculator models neither: it does not determine whether an early distribution would incur an additional tax.

On recharacterization: a conversion made in 2018 or later generally cannot be recharacterized back to a traditional IRA. The 2025 Instructions for Form 8606 state it directly — no recharacterizations of conversions made in 2018 or later. Plan on the basis that a conversion is not reversible.

On reporting: a conversion is reported on Form 8606, and the 2025 instructions require the form for anyone who converted an amount from a traditional IRA to a Roth IRA during the year. What this page produces is an estimate of the taxable amount under your stated assumptions — not a line on a return, and not a substitute for the form or for advice about it.

On paying the conversion tax from the IRA: that scenario models less money reaching the Roth, but it does not calculate any additional early-distribution tax that may apply to the amount distributed rather than converted. Publication 590-B and Topic no. 557 describe an additional 10% tax that generally applies to amounts distributed from an IRA before age 59 1/2 unless an exception applies. Because this page asks for neither an age nor a reason, it computes no such tax and you should not read its absence as a conclusion.

On required minimum distributions: they are not modelled here, and neither is any interaction between a conversion and required distributions. No age threshold is asserted on this page.

Take $400,000 across all traditional IRAs, $20,000 of nondeductible basis, and a $100,000 conversion, at a 24% federal and 5% state marginal rate today, 22% federal and 5% state at withdrawal, a 6% return and twenty years to go. The tax is paid from outside funds, and that cash would otherwise have earned 6% with a 15% annual tax drag.

The denominator is the $300,000 left at year end plus the $100,000 converted: $400,000. Against $20,000 of basis that is a ratio of 0.05, so $5,000 of the conversion is nontaxable and $95,000 is taxable. The tax is $22,800 federal plus $4,750 state, $27,550 in all — an effective 27.55% of the conversion, below the 29% marginal rate because part of it was basis. $15,000 of basis stays with the $300,000 left behind.

Twenty years on, not converting leaves $1,282,854 gross, of which $1,262,854 is taxable at 27%, for $941,884 net. Converting leaves a $320,714 Roth, plus $962,141 of traditional assets that pay $255,728 of tax to net $706,413 — and costs the $74,503 those outside dollars would have grown into. Net wealth: $952,623 against $941,884. The conversion is ahead by $10,739.

The break-even future rate is 23.60%. Below that combined rate the conversion loses; above it, it wins. That it sits five and a half points under today's 29% is the useful part: it is the basis, the horizon and the cost of the tax cash that put it there, not the rate comparison alone.

Two changes move the answer more than the rate assumption does. Pay the tax from the IRA instead, and only $72,450 reaches the Roth: the $10,739 advantage becomes a $3,114 cost, and the break-even rises to 27.99%. And suppose the remaining IRAs are worth $310,000 by December 31 rather than $300,000 — the denominator becomes $410,000, the nontaxable portion falls to $4,878, and the tax rises to $27,585. Small here, but it is the kind of detail a fixed-denominator shortcut cannot show at all.

The table below isolates the assumption the decision is usually framed around.