Tax strategy · Step-by-step guide

When to do Roth conversions,
using low-income years.

READ3 min·UPDATED·APPLIES TOUnited States·LEVELIntermediate
For people with low-income years deciding when to convert. Sources are listed at the bottom of the page; check their dates before acting.

Roth conversions are not just for the five-year ladder. Any year your income is lower than usual is a window to convert Traditional IRAIndividual Retirement Account (IRA)A retirement account with tax advantages and eligibility rules. Traditional IRA contributions may be deductible; taxable withdrawals generally enter income. Roth contributions use after-tax money, and qualified Roth withdrawals are tax-free.Full definition or 401(k) money to Roth at a lower tax rate. This page covers how to find your window and fill the right brackets without tripping secondary taxes.

This page covers US-specific accounts and tax law. Outside the US? The idea of converting in low-income years carries over, but the account names and rules differ (ISAIndividual Savings Account (ISA)A UK tax-advantaged account where contributions are post-tax but all growth and withdrawals are tax-free.Full definition in the UK, TFSATax-Free Savings Account (TFSA)A Canadian tax-advantaged account where contributions are post-tax but all growth and withdrawals are tax-free.Full definition/RRSPRegistered Retirement Savings Plan (RRSP)A Canadian tax-deferred retirement account; contributions reduce taxable income and growth is tax-deferred until withdrawal.Full definition in Canada, Super in Australia, etc.).

This page covers sizing a conversion to fill a low-income year's brackets. For the five-year early-access ladder, see Roth Conversion Ladder; for the full case for converting and the cross-cutting mechanics, see Roth Conversions.

Short answer

Identify years when your taxable income is lower than normal. Convert Traditional money to Roth up to the top of your current bracket. Pay tax now at the lower rate rather than later at the higher rate. Coordinate with capital-gain harvesting: both use the same low-bracket space. Watch for ACA subsidies, IRMAAIncome-Related Monthly Adjustment Amount (IRMAA)A Medicare surcharge added to your monthly premium if your income exceeds certain thresholds.Full definition, and Social Security taxation.

The bracket-filling approach

The goal is to fill lower brackets, not convert everything at once.

EXAMPLE (2026, SINGLE)
  • Ordinary income: $30,000
  • Standard deductionstandard deductionA fixed dollar amount that reduces your taxable income without itemizing. Most people claim this instead of listing individual deductions.Full definition: $16,100
  • Taxable income: $13,900
  • 12% bracket goes to $50,400
  • Empty bracket space: $36,500
  • Convert $36,500 of traditional to Roth at 12% marginal rate
  • Tax: ~$4,380
  • Without conversion, that money would later be withdrawn in a year when income might be higher
Convert up to the top of the 12% bracket
Example: 2026, single filer
No conversion$30,000 ordinary income
$16,100$13,900$36,500 empty12% bracket ends at $50,400 taxable
Bracket filledtraditional to Roth
$16,100$13,900$36,500 converted
Standard deductionTaxable incomeEmpty 12% bracket spaceConversion, taxed at 12%
Tax on the conversion
Converted$36,500
Marginal rate12%
Tax paid now~$4,380instead of later, when income might be higher
The page's 2026 single example, drawn to scale. After the $16,100 standard deduction, $13,900 is taxable, leaving $36,500 of room under the top of the 12% bracket. Converting exactly that much fills the bracket to the line for about $4,380 of tax at 12%, with nothing pushed past it.

Windows to target

  • Early retirement before Social Security. Lowest-income years of adult life. Deferring SS to age 70 extends the window. Convert aggressively.
  • Career gap. Taking time off between jobs. Lower income, lower brackets.
  • Sabbatical year.
  • Year of significant deductions. Large charitable gift, business loss, major medical above threshold.
  • Market downturn. Convert after a drop. You pay tax on a lower value. Recovery happens inside the Roth, tax-free.

What to watch for

ACA subsidy interaction

Roth conversionRoth conversionMoving eligible retirement money into a Roth account. Pre-tax amounts and earnings generally create taxable income; nondeductible basis is treated under the applicable aggregation rules. Conversions can affect tax brackets and income-based costs, and separate withdrawal rules apply.Full definition counts as income. Can push you above ACA subsidy thresholds and dramatically raise healthcare costs for the year ×DON'T TRUST, VERIFYClaim: Modified AGI including Roth conversions counts toward ACA subsidy eligibility.Verify at: healthcare.gov ↗ Source 1 in the list belowACA uses MAGI. Conversions flow through.. Model before converting.

IRMAA

A high conversion year can trigger Medicare IRMAA surcharges two years later ×DON'T TRUST, VERIFYClaim: IRMAA uses Modified AGI from 2 years prior to determine Medicare Part B and D surcharges.Verify at: medicare.gov ↗ and SSA IRMAA ↗ Source 2 in the list belowTwo-year lookback with life-change event appeal available.. Plan ahead.

Social Security taxation

Provisional incomeprovisional incomeThe income figure used to determine how much of your Social Security benefit is taxable. Includes adjusted gross income, tax-exempt interest, and 50% of your Social Security benefit. Up to 85% of SS benefits can be taxable for higher earners. includes Roth conversions. Can push SS benefits into taxable territory (up to 85% taxable).

Bitcoin sale + Roth conversion

Do not stack in the same year if you can avoid it. Both add to taxable income. Two moderate-income years usually cost less in tax than one large-income year.

Where to go from here

Do next

Full Tax Estimator

Confirm the total federal and state bill before converting.

Read next

Withdrawal Sequencing

The account order to pair with conversions to keep lifetime tax low.

Explore further

Sources

Verify badges in the text link to these sources. Figures, rates and rules change: check each source’s date before acting on it.

  1. HealthCare.gov (CMS), healthcare.gov/ ↩
  2. Medicare.gov (CMS), Welcome to Medicare | Medicare ↩
  3. SSA IRMAA · ssa.gov

Last updated . Not financial or tax advice. Disclosures · How pages are reviewed

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