Explanation
What is a Roth conversion
What a Roth conversion is, how it is taxed, and when it may or may not make sense.
A Roth conversion is a deliberate change in how retirement assets are taxed.
It moves money from a tax-deferred account (such as a traditional IRA) into a Roth account, where future growth may be tax-free.
The conversion itself is taxable.
Understanding how and when that tax is triggered is the core of the decision.
What a Roth conversion actually is
A Roth conversion is not a contribution.
It is a reclassification of existing assets.
When a conversion occurs:
+ The converted amount is added to ordinary income
+ The income is taxed in the year of conversion
+ The assets then follow Roth rules going forward
Nothing about the money changes — only its tax treatment.
How Roth conversions are taxed
Converted dollars are taxed as ordinary income.
They stack on top of other income sources, including:
+ Wages or self-employment income
+ Social Security (if taxable)
+ Pensions
+ Required minimum distributions (RMDs)
The marginal tax rate applied depends on where the conversion lands within the tax brackets.
Why timing matters
Roth conversions are sensitive to timing.
The same conversion can produce very different tax outcomes depending on:
+ Current income level
+ Filing status
+ Available “room” in a tax bracket
+ Interaction with credits or thresholds
This is why conversions are often spread across multiple years rather than done all at once.
Interactions that often matter
Roth conversions do not exist in isolation.
They can interact with:
+ Marginal tax brackets
+ Medicare IRMAA thresholds
+ Capital gains realization
+ Social Security taxation
+ Future RMD requirements
Small changes in income can trigger large downstream effects.
When a Roth conversion may make sense
A Roth conversion may be worth exploring when:
+ Current tax rates are lower than expected future rates
+ Income is temporarily reduced
+ RMDs are expected to push income higher later
+ Estate or legacy considerations matter
These are contextual conditions, not rules.
When a Roth conversion may not make sense
A conversion may be less favorable when:
+ Current income is already high
+ The conversion triggers higher marginal or Medicare costs
+ Funds will be needed soon
+ The tax cost outweighs long-term benefit
Conversions are optional — not defaults.
What this system shows
NotTaxAdvice does not recommend whether to convert.
Instead, it shows:
+ How a conversion changes taxable income
+ Which brackets are affected
+ What thresholds are crossed
+ How future years are impacted
The goal is visibility, not prescription.
What this system does not do
NotTaxAdvice does not:
+ Optimize a conversion amount
+ Predict future tax law
+ Guarantee savings
+ Replace professional judgment
Those decisions remain human.
How to use this explanation
This explanation is meant to help you understand:
+ What a Roth conversion does mechanically
+ Why outcomes change when you adjust amounts or timing
+ Which interactions deserve attention
Understanding comes first.
Decisions come later.