Is a Roth Conversion Right for You? A San Antonio CPA Weighs In

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Jessica Gonzalez, CPA | Published June 25, 2026 | Updated October 4, 2026

A Roth conversion makes sense when the federal tax you pay to convert now is likely lower than the tax you, or your heirs, would pay on that money later, and when you can pay the bill from savings outside the IRA. It often doesn’t make sense when you’ll need the money soon, when the extra income raises your Medicare premiums, or when your tax rate today is the same as or higher than it will be in retirement.

I don’t start with tax brackets. I start with your goals. Then I map your income year by year and tell you plainly when a conversion helps, when it’s a wash, and when it would cost more than it saves. No outcome is guaranteed, but the decision should rest on your numbers, not a rule of thumb.

The One Big Beautiful Bill Act changed the math in 2025, including a temporary deduction for people 65 and older that a conversion can shrink. Here is the checklist I work through.

Start With Your Retirement Goals, Not Your Roth Conversion Tax Bracket

In my practice, people often come in after reading an article urging them to convert as much as possible, as fast as possible. What gets skipped is whether a conversion serves your retirement, not a generic one.

So I ask first. Do you plan to travel heavily early, then slow down? Do you want to leave money to children or grandchildren? Will you be mortgage-free? Do you have a pension or rental income that sets a reliable floor? These answers drive hard numbers. A Roth conversion is a prepayment of tax, and whether it’s worth it depends on what you’re prepaying for. It’s one piece of the broader retirement tax planning I do for people approaching this decision.

My Roth Conversion Checklist: The Full Financial Picture

Your current and future income sources

Social Security, pensions, part-time work, rental income, and required minimum distributions (RMDs) all stack up. Once assembled, retirement income is often higher than people expect.

Your tax bracket now versus later

For 2026, married couples filing jointly pay 12% on taxable income up to $100,800 and 22% from there up to $211,400 (IRS). The One Big Beautiful Bill Act removed the 2025 end date for these brackets, so they continue under current law, though Congress can still change them. The real question is whether your rate in retirement will be higher, lower, or about the same.

Your RMD timeline

RMDs from traditional IRAs generally start at age 73 (IRS). Under SECURE 2.0, that age rises to 75 for people born in 1960 or later (Treasury proposed regulations). The years between retirement and your first RMD are often your lowest-income years, which makes them a natural conversion window. Roth IRAs, and Roth accounts in a 401(k) or 403(b), have no RMDs while the owner is alive.

Your Medicare premiums (IRMAA)

Converted dollars count in your modified adjusted gross income (MAGI). Social Security sets Medicare surcharges, called IRMAA, using your tax return from two years earlier. Your 2026 premiums are generally based on your 2024 return (SSA).

For 2026, the standard Part B premium is $202.90 a month. Surcharges start when MAGI is above $109,000 for single filers or $218,000 for joint filers (CMS). Each tier is a cliff: one dollar over triggers the full surcharge. The first tier adds $81.20 a month for Part B and $14.50 a month for Part D, per person. For a couple who both have Part B and Part D, that’s $2,296.80 for the year. If your income dropped because you stopped working, you can ask Social Security to use a more recent year on Form SSA-44.

How your Social Security is taxed

Up to 85% of Social Security benefits can be taxable once your “combined income” passes certain levels. The base amounts are $25,000 for single filers and $32,000 for married couples filing jointly (IRS Publication 915). If you convert while collecting benefits, the conversion can make more of your benefits taxable. Each converted dollar can then cost more than your bracket suggests. Converting before you claim avoids that overlap.

The new senior deduction

For 2025 through 2028, people 65 and older can deduct up to $6,000 each ($12,000 for a married couple who both qualify), whether or not they itemize (IRS). It phases out by 6% of MAGI above $75,000, or $150,000 for joint filers. For a couple who both qualify, each spouse’s $6,000 shrinks, so their combined deduction drops by 12 cents for every dollar over $150,000. It’s gone at $250,000.

For that couple in the 22% bracket, a converted dollar that also shrinks the senior deduction costs about 24.6 cents, not 22. Sometimes the best stopping point is just under $150,000 of MAGI.

Your state tax situation

Texas has no state income tax, so a conversion here is taxed only at the federal level. If you plan to move to a state that taxes income, converting while you’re still a Texas resident can be worth a look.

Your time horizon

Converted money needs years to grow tax-free. If you’ll spend it within a few years, the math rarely works.

Roth Conversion Rules to Know Before You Convert

A conversion can’t be undone

Recharacterization, the old way to reverse a conversion, isn’t allowed for conversions made in 2018 or later (IRS Publication 590-A). If the market drops after you convert, you still owe tax on the value you converted. That’s one reason I usually look at partial conversions spread over several years, done later in the year when your income picture is clearer.

Pay the tax from outside the IRA

The converted amount is taxable income in the year of the conversion. The 10% early-withdrawal tax doesn’t apply to the conversion itself (IRS Publication 590-A). But if you have tax withheld from the conversion, the withheld amount is a distribution, not a conversion. If you’re under 59½, it may face the 10% additional tax. Paying from savings keeps more money growing tax-free. A large conversion may also call for an estimated tax payment, which is part of year-round tax planning.

The two Roth 5-year rules

There are two separate clocks (IRS Publication 590-B):

• The earnings clock. Earnings come out tax-free only in a qualified distribution. That generally means it’s been five tax years since the first year you funded any Roth IRA, and you’re 59½ or older (or another exception applies).
• The conversion clock. Each conversion has its own five-year period. If you’re under 59½ and withdraw converted dollars before that period ends, the 10% additional tax can apply.

The December 31 deadline

A conversion counts in the year the money leaves the traditional IRA. Unlike Roth contributions, there’s no extension to April. A 2026 conversion has to be completed by December 31, 2026.

What your heirs inherit

Most non-spouse beneficiaries must empty an inherited IRA within 10 years. Distributions from an inherited traditional IRA are taxable to them, often during their peak earning years. An inherited Roth IRA follows the same 10-year deadline, but the beneficiary doesn’t need to take yearly withdrawals within that window, and qualified withdrawals are tax-free (IRS Publication 590-B). Surviving spouses, the owner’s minor children, and a few others have different options.

A Hypothetical Roth Conversion Example Under 2026 Rules

This example is hypothetical. The people and numbers are made up to show how the 2026 rules interact. It is not a projection for you or anyone else.

A married couple, both born in 1960, turn 66 in 2026. They file jointly and live in Texas. They’re retired with a $40,000 taxable pension, no other income, and plan to claim Social Security at 70. They have sizable traditional IRAs, cash in savings to pay any conversion tax, and both are on Medicare Parts B and D. Because they were born in 1960, their RMDs won’t start until 75.

Their 2026 deductions add up to $47,500: the $32,200 standard deduction, $1,650 each for being 65 or older (Rev. Proc. 2025-32), and the $12,000 senior deduction, as long as MAGI stays at or under $150,000. With only $40,000 of income, $7,500 of those deductions would go unused.

Scenario	AGI (MAGI)	Total deductions	Taxable income	Federal income tax
No conversion	$40,000	$47,500	$0	$0
Convert $108,300	$148,300	$47,500	$100,800	$11,600
Convert $160,000	$200,000	$41,500	$158,500	$24,294

Filling the 12% bracket. Converting $108,300 brings taxable income to exactly $100,800, the top of the 12% bracket. The tax is $11,600, about 10.7% of the amount converted. The first $7,500 is covered by deductions they would otherwise waste.

Going further. Converting $160,000 pushes MAGI to $200,000. The senior deduction drops from $12,000 to $6,000. The extra $51,700 converted costs $12,694 more in tax, about 24.6%. They stay under the 2026 IRMAA line of $218,000, but a 2026 conversion affects their 2028 premiums, and the 2028 thresholds aren’t published yet.

What this shows. Whether a 10.7% average rate is a good price depends on their rate later, once Social Security starts at 70 and RMDs start at 75. If that income would put them in the 22% bracket, converting at a lower rate now may help. If their later income would stay modest, it may be a wash. The senior deduction is also scheduled to end after 2028, so its effect on the math changes after that year.

When a Roth Conversion Works Best, and When It Doesn’t

A Roth conversion is not a tax dodge. You pay ordinary income tax on every dollar converted, in exchange for tax-free growth, tax-free qualified withdrawals, and no RMDs on that money.

It tends to work best when:

• You have a real low-income window, often between retirement and your first RMD
• You can pay the tax from savings outside the IRA
• Your heirs are likely to be in a higher bracket than you
• Your future RMDs are large enough that shrinking them is worth the upfront cost

It tends to work poorly when:

• You need the money in the next few years
• The conversion pushes you over an IRMAA tier or deep into the senior-deduction phaseout
• You’d convert at a rate equal to or above your expected retirement rate
• The extra income makes more of your Social Security taxable at a higher rate

When to Get Help With a Roth Conversion Decision

If you’re within a few years of retirement, hold significant pre-tax savings, or are already on Medicare, a conversion touches several rules at once: brackets, the senior deduction, IRMAA, Social Security, and RMDs. A Roth conversion analysis models those pieces over several years so you can see the trade-offs before you act. If you’re not sure you need a full analysis, a tax planning session is a lighter place to start.

Roth Conversion FAQ

Can I undo a Roth conversion?

No. Conversions made in 2018 or later can’t be recharacterized. Once it’s done, the tax is owed on the amount converted.

Is there an income limit for a Roth conversion?

No. Income limits apply to Roth contributions, not conversions. Anyone with a traditional IRA can convert.

What is the deadline for a 2026 Roth conversion?

December 31, 2026. There’s no extension into the next year for conversions.

Will a Roth conversion raise my Medicare premiums?

It can, two years later. A 2026 conversion counts in the income Social Security uses to set your 2028 premiums.

Do I pay Texas tax on a Roth conversion?

No. Texas has no state income tax. You pay federal income tax on the converted amount.

Talk Through a Roth Conversion With a San Antonio CPA

I’m Jessica Gonzalez, a Texas-licensed CPA and former IRS Revenue Agent. I work with individuals and families in North San Antonio, Stone Oak and Sonterra, Bulverde, and all of San Antonio, in English and Spanish, with secure virtual service. Military families are welcome. A Roth conversion analysis starts at $1,200, and a tax planning session starts at $1,000. You’ll get a fixed fee in writing before any work begins. You can see more on my pricing page.

To see whether we’re a fit, book a complimentary 15-minute fit call or call (210) 441-1293. Please don’t email tax returns, Social Security numbers, or IRS notices; I’ll send a secure SmartVault link.

Sources

• IRS Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs)
• IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs)
• IRS: Roth IRAs
• IRS: Retirement Topics, Required Minimum Distributions (RMDs)
• Federal Register: Required Minimum Distributions, proposed regulations (July 19, 2024)
• IRS: Tax inflation adjustments for tax year 2026
• IRS Revenue Procedure 2025-32
• IRS: One Big Beautiful Bill Act tax deductions for working Americans and seniors
• Congress.gov: H.R. 1, One Big Beautiful Bill Act (Public Law 119-21)
• CMS: 2026 Medicare Parts A and B Premiums and Deductibles
• SSA: Premiums, Rules for Higher-Income Beneficiaries
• IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits

Related: Retirement Tax Planning · Year-Round Tax Planning · Pricing