The editor of The Kiplinger Tax Letter responds to readers asking about Roth conversions, specifically converting a traditional retirement account, funded with pretax money, to a Roth IRA.
Question: I am thinking about doing a Roth IRA conversion this year. What adverse tax impacts should I know about Roth conversions?
Answer: The converted funds will be subject to income tax for the year of the conversion. And if your Roth IRA assets go down in value soon after the conversion, you cannot undo the conversion. The 2017 Tax Cuts and Jobs Act ended so-called recharacterizations of Roth conversions.
Note that the additional income from converting can trigger higher adjusted gross income on your 2026 tax return. A higher AGI could preclude you from taking deductions that have AGI threshold limitations — and there are lots of these types of deductions. For example, the One Big Beautiful Bill Act, passed last year, provides several new deductions, including a $6,000 senior deduction for filers who are 65 and older as well as deductions for qualified tips, qualified overtime compensation and auto loan interest. These all have AGI thresholds that are aimed at preventing individuals with higher income levels from using these breaks. A higher AGI could also affect your ability to deduct medical expenses if you itemize on Schedule A.
For Medicare recipients, the additional income from a Roth conversion can trigger higher premiums. Individuals with 2024 modified AGI over $218,000 for joint filers and $109,000 for single filers pay a monthly surcharge in 2026 for Parts B and D coverage on top of their regular premiums. Income from converting from a traditional IRA to a Roth IRA is included in the calculation of modified AGI.
Question: My husband owns one traditional IRA. He turns 73 this year and wants to wait until the first quarter of 2027 to take his first annual required minimum distribution. Can he do a Roth conversion in 2026 before taking his first RMD in early 2027?
Answer: No. Traditional IRA owners who are 73 and older must take annual RMDs. People of RMD age who are considering a Roth IRA conversion must first take their annual RMD for the year before doing the conversion. A person who turns 73 in 2026 can wait until April 1, 2027, to take the first RMD. But that first RMD, even if delayed, is still an RMD for 2026 and is based on the IRA balances as of December 31, 2025.
Your husband has two choices: He can take his 2026 required minimum distribution from his traditional IRA this year and then do a 2026 Roth conversion. Or he can defer taking his 2026 RMD until no later than April 1, 2027, and do the Roth conversion after that date.
Question: I have four traditional IRAs. I want to convert a part of one of my IRAs to a Roth this year. I know I have to take my annual RMD for 2026 before I do the Roth conversion. How does this rule work in my case?
Answer: It can be tricky. If a person has multiple traditional IRAs, the total aggregate RMD for the year must be withdrawn during the year before doing a Roth conversion from any of the traditional IRAs. (Note that this doesn’t include RMDs from 401(k)s or other workplace retirement plans.)
For example, say your 2026 aggregate RMD from your four traditional IRAs is $68,526. If you want to do a Roth conversion from any of those IRAs in 2026, you must first take your aggregate RMD from any of the traditional IRAs that you choose and then do the Roth conversion for the year. Note that this RMD twist involving Roth conversions and multiple traditional IRAs is relatively new, enacted in late 2022 in the SECURE 2.0 Act.
Question: Can a non-spouse beneficiary of an inherited IRA convert it to a Roth IRA?
Answer: No. The beneficiary can, however, take taxable distributions from the traditional IRA over time and contribute the post-tax money to a Roth IRA, subject to the Roth IRA annual contribution limits, provided the person has sufficient taxable compensation and the person’s AGI in the year of the contribution doesn’t exceed certain limits.
For 2026, the Roth IRA contribution limit is $7,500, or $8,600 for individuals age 50 and older. The AGI limits start at $153,000 for single filers and $242,000 for joint filers.
Question: I understand that to withdraw money from a Roth IRA without paying tax or a penalty on the investment earnings, the account owner must have had the money in the Roth IRA for at least five years and be age 59½ or older. If contributions are made over several years, when does the five-year clock start? Also, do the rules differ for Roth IRA conversions?
Answer: There are two five-year rules that apply to Roth IRAs. The first applies to Roth IRA contributions, including rollovers and conversions, and determines whether distributed earnings are tax-free to you. Under this rule, distributions of earnings after age 59 1/2 aren’t taxed if at least five tax years have passed since the owner first contributed to a Roth IRA.
For this first five-year rule, the five-year clock starts the first time that money is deposited into any Roth IRA that you own, through either a contribution or a conversion from a traditional IRA. The clock doesn’t start again for later Roth contributions, for conversions or for newly opened Roth IRA accounts.
The second five-year rule applies specifically to Roth IRA conversions and determines whether the 10% early-distribution penalty hits payouts received before age 59 1/2. Under this rule, if someone who is younger than 59 1/2 does a Roth conversion and later takes a distribution within five years of the conversion and before turning 59 1/2, then the amount of conversion principal that is withdrawn is subject to the 10% penalty. Once you turn 59 1/2, you needn’t worry, even if you take a payout before your conversion meets the five-year period.
This rule is designed to prevent people who are younger than 59 1/2 from circumventing the early-withdrawal penalty that would apply to their distribution from a traditional IRA by first doing a Roth conversion and soon thereafter taking the money out of the Roth IRA. The rule doesn’t apply to new contributions to Roth IRAs, but to conversions of pretax income from traditional IRAs to a Roth.
Under this second five-year rule, each conversion has its own separate five-year period, which differs from the first five-year rule discussed above. For instance, if you do multiple Roth IRA conversions, there will be multiple five-year time periods, even if each conversion is done into the same Roth IRA account that you have owned for years.
Joy Taylor is the editor of The Kiplinger Tax Letter. For more on this and similar money topics, visit Kiplinger.com.
©2026 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC.
Read more helpful financial articles like this one on Seniors Guide:
How a Roth Can Diffuse a Retirement Tax Bomb
