A Roth conversion can be a useful retirement-planning strategy for people who want to move money from a traditional IRA or other eligible pre-tax retirement account into a Roth IRA. The major consideration is that the converted amount is generally included in taxable income, which can increase your federal and state tax liability for the year of the conversion.
Schwab Roth Conversion Calculator
What Is a Roth Conversion?
A Roth conversion is the process of moving money from a traditional retirement account into a Roth IRA. Traditional retirement accounts generally receive tax benefits before retirement, while qualified Roth IRA withdrawals can be tax-free.
The important difference is the timing of taxation.
With many traditional retirement accounts, contributions and earnings can receive tax-deferred treatment. When pre-tax money is converted to a Roth IRA, the taxable portion of the conversion is generally added to your income for that tax year.
For example, suppose your taxable income before a conversion is $70,000 and you convert $30,000 to a Roth IRA. Ignoring other adjustments, the conversion could increase taxable income to approximately $100,000.
The additional $30,000 does not necessarily get taxed at one single rate. Federal income tax uses a progressive bracket system, meaning portions of taxable income are taxed at different rates.
That is why estimating the incremental tax from a conversion can be more useful than simply multiplying the conversion amount by one tax rate.
What the Schwab Roth Conversion Calculator Estimates
This calculator considers five primary inputs:
- Federal filing status
- Current taxable income before conversion
- Roth conversion amount
- Additional taxable deductions
- Estimated state tax rate
After you enter these values, the calculator estimates:
- Income before conversion
- Income after conversion
- Federal tax before conversion
- Federal tax after conversion
- Additional federal tax
- Estimated state tax
- Total additional tax
- Effective federal tax rate on the conversion
- Marginal federal tax rate after conversion
These results can help you understand the potential tax impact of converting a specific amount.
How to Use the Schwab Roth Conversion Calculator
Using the calculator is straightforward.
Step 1: Select Your Federal Filing Status
Choose the filing status that applies to your tax situation:
- Single
- Married Filing Jointly
- Head of Household
- Married Filing Separately
The calculator uses different 2026 federal tax brackets for each status.
Because tax brackets vary by filing status, selecting the correct option is important.
Step 2: Enter Current Taxable Income
Enter your estimated taxable income before the Roth conversion.
This is important because taxable income is different from gross income. Taxable income is generally the amount remaining after applicable deductions and adjustments have been accounted for.
For example, someone could have a much higher gross income but a lower taxable income after deductions.
Step 3: Enter the Roth Conversion Amount
Enter the amount you are considering converting to a Roth IRA.
For example:
- $10,000
- $25,000
- $50,000
- $100,000
The calculator requires the conversion amount to be greater than $0.
Step 4: Enter Additional Taxable Deductions
If you expect additional taxable deductions that should be reflected in your estimate, enter the amount here.
The default value is $0.
The calculator subtracts this amount from income before determining the taxable income used in its federal tax estimate.
Step 5: Enter Your Estimated State Tax Rate
Enter your estimated state tax rate as a percentage.
If you want to estimate only the federal portion, you can enter 0%.
For example, if you estimate that the conversion will be subject to a 5% state tax rate, enter:
5
The calculator then estimates state tax as a percentage of the conversion amount.
Step 6: Select Calculate
Click Calculate to generate the estimate.
The results section displays the estimated tax differences and rates.
Roth Conversion Formula Explained
The calculator follows several steps to estimate the tax effect of the conversion.
1. Taxable Income Before Conversion
The first calculation is:
Taxable Income Before Conversion = Current Income − Additional Taxable Deductions
The result cannot fall below zero.
For example:
- Current taxable income: $80,000
- Additional deductions: $5,000
Calculation:
$80,000 − $5,000 = $75,000
The estimated taxable income before the conversion is therefore $75,000.
2. Taxable Income After Conversion
The calculator then adds the Roth conversion:
Taxable Income After Conversion = Current Income + Roth Conversion − Additional Deductions
Suppose:
- Current income = $80,000
- Conversion = $30,000
- Deductions = $5,000
Then:
$80,000 + $30,000 − $5,000 = $105,000
The estimated taxable income after conversion is $105,000.
3. Federal Tax Before Conversion
The calculator applies the selected filing status's 2026 federal ordinary-income tax brackets to taxable income before the conversion.
The calculation is progressive.
That means the entire income amount is not multiplied by the highest bracket rate reached.
For example, if income crosses from one bracket into another, only the portion above the relevant threshold is taxed at the higher rate.
This distinction is particularly important when evaluating Roth conversions.
4. Federal Tax After Conversion
The same progressive tax calculation is applied to taxable income after the conversion.
The calculator therefore produces two federal tax estimates:
Federal Tax Before Conversion
and
Federal Tax After Conversion
The difference between these two values represents the estimated additional federal tax attributable to the conversion under the calculator's assumptions.
5. Additional Federal Tax
The formula is:
Additional Federal Tax = Federal Tax After Conversion − Federal Tax Before Conversion
The calculator ensures the result is not negative.
This figure is often one of the most useful outputs because it isolates the estimated increase in federal income tax associated with the conversion.
6. Estimated State Tax
The state tax estimate is calculated separately:
Estimated State Tax = Roth Conversion × State Tax Rate
For example, a $40,000 conversion at a 5% estimated state tax rate produces:
$40,000 × 0.05 = $2,000
This is a simplified estimate. Actual state taxation can depend on state-specific rules, deductions, exemptions, income thresholds, and other factors.
7. Total Additional Tax
The calculator adds the estimated federal and state tax:
Total Additional Tax = Additional Federal Tax + Estimated State Tax
For example, if the estimated additional federal tax is $6,000 and estimated state tax is $2,000:
$6,000 + $2,000 = $8,000
The estimated total additional tax would be $8,000.
8. Effective Federal Tax Rate on the Conversion
The calculator also determines the effective federal tax rate specifically on the conversion:
Effective Federal Tax Rate = Additional Federal Tax ÷ Conversion Amount × 100
Suppose a $30,000 conversion creates $6,000 in additional federal tax:
$6,000 ÷ $30,000 × 100 = 20%
The effective federal tax rate on the conversion would be 20%.
This can differ from the marginal tax bracket because a conversion may span multiple tax brackets.
2026 Federal Tax Brackets Used by the Calculator
The calculator contains the following federal ordinary-income brackets.
| Filing Status | 10% Bracket Ends | 12% Bracket Ends | 22% Bracket Ends | 24% Bracket Ends | 32% Bracket Ends | 35% Bracket Ends |
|---|---|---|---|---|---|---|
| Single | $12,400 | $50,400 | $105,700 | $201,775 | $256,225 | $640,600 |
| Married Filing Jointly | $24,800 | $100,800 | $211,400 | $403,550 | $512,450 | $768,700 |
| Head of Household | $17,700 | $67,450 | $105,700 | $201,750 | $256,200 | $640,600 |
| Married Filing Separately | $12,400 | $50,400 | $105,700 | $201,775 | $256,225 | $384,350 |
Income above the final listed threshold is calculated at the 37% rate within the calculator.
These thresholds are the values programmed into this particular calculator and are intended for estimation purposes.
Roth Conversion Example
Consider a hypothetical taxpayer with these inputs:
| Input | Example |
|---|---|
| Filing status | Single |
| Current taxable income | $70,000 |
| Roth conversion | $30,000 |
| Additional deductions | $0 |
| Estimated state tax rate | 5% |
Income Before Conversion
The taxpayer begins with:
$70,000 taxable income
Income After Conversion
Adding the $30,000 conversion:
$70,000 + $30,000 = $100,000
The conversion increases estimated taxable income by $30,000.
State Tax Estimate
At a 5% state tax rate:
$30,000 × 5% = $1,500
So the calculator estimates $1,500 of state tax attributable to the conversion.
Federal Tax
The federal tax calculation is progressive. The $30,000 conversion is not automatically taxed entirely at the taxpayer's highest bracket.
Some of the conversion may fall into one bracket while the remainder may fall into another.
The calculator compares the total estimated federal tax before and after the conversion to determine the incremental federal tax.
Why Marginal Tax Rate Matters for Roth Conversions
The marginal federal tax rate is the rate applied to the next dollar of taxable income within the applicable tax bracket.
This is different from the effective tax rate.
Suppose a taxpayer has taxable income near the upper end of a federal bracket. A Roth conversion could push some of the conversion into the next bracket.
That does not mean the entire conversion is taxed at the higher rate.
Instead, only the portion that falls into the higher bracket is taxed at that rate.
This is one reason taxpayers sometimes evaluate different conversion amounts rather than automatically converting an entire retirement account at once.
Why You Might Compare Different Conversion Amounts
A Roth conversion does not have to be evaluated as an all-or-nothing decision.
For planning purposes, someone might compare:
| Conversion | Possible Purpose |
|---|---|
| $10,000 | Smaller tax increase |
| $25,000 | Moderate conversion |
| $50,000 | Larger retirement-account conversion |
| $75,000 | More aggressive conversion |
| $100,000 | Large conversion requiring careful tax planning |
The appropriate amount depends on the individual's circumstances, including current and expected future income, tax rates, retirement plans, available cash for taxes, and other financial considerations.
The calculator can be used repeatedly with different conversion amounts to compare the resulting estimates.
Roth Conversion Taxes Are Different From Ordinary Investment Taxes
A Roth conversion should not be confused with selling an investment in a taxable brokerage account.
When you sell an investment in a taxable account, capital gains rules may apply.
A traditional-to-Roth conversion generally involves the taxation of the taxable portion of the amount converted as ordinary income.
Therefore, the tax treatment can be very different.
This calculator focuses on ordinary federal income tax brackets and does not attempt to calculate every type of investment-related tax.
Important Factors the Calculator Does Not Include
The calculator is intentionally simplified. Several factors may affect an actual tax return.
Tax Credits
Tax credits can reduce tax liability and may change the actual amount owed.
The calculator does not account for every federal tax credit.
Medicare-Related Effects
A higher modified adjusted gross income can affect certain Medicare-related costs for some taxpayers.
A Roth conversion can therefore have consequences beyond the basic federal income-tax calculation.
The calculator does not estimate those effects.
Capital Gains
Long-term capital gains and qualified dividends can receive different tax treatment from ordinary income.
The calculator does not model the interaction between Roth conversions and capital gains.
Other Income
Interest, dividends, wages, business income, rental income, retirement distributions, and other sources of income can affect your overall tax situation.
The calculator is not a complete tax-return simulator.
State-Specific Rules
The state tax estimate uses the percentage you enter. It does not calculate every state-specific tax provision.
Some states have different deductions, exemptions, rates, or special treatment for retirement income.
Roth Conversion and Tax Withholding
Another important consideration is how you pay the tax generated by a conversion.
A taxpayer may need to plan for the additional tax liability rather than assuming that the conversion itself is tax-free.
If taxes are paid from the retirement account during the conversion, the amount remaining in the Roth may be reduced. Depending on the taxpayer's age and circumstances, withholding from a retirement account can also introduce additional considerations.
For many people, having funds available outside the retirement account to cover taxes can be an important part of conversion planning.
The exact approach should be evaluated based on individual circumstances.
Roth Conversion Timing
The timing of a conversion can influence its tax impact because taxable income can vary significantly from year to year.
For example, someone who expects unusually low taxable income in a particular year may evaluate whether a conversion during that year fits their overall tax plan.
Similarly, a year with unusually high income may produce a different tax result.
Using the calculator with multiple income and conversion assumptions can help illustrate how changing taxable income affects the estimated incremental tax.
How to Use the Calculator for Scenario Planning
One of the most useful ways to use this tool is to create several scenarios.
Start with your estimated taxable income and then test several conversion amounts.
For example:
- Enter your current taxable income.
- Enter a $10,000 conversion.
- Record the estimated additional federal tax.
- Repeat with $20,000.
- Repeat with $30,000.
- Continue with larger amounts if relevant.
- Compare the additional tax and effective rate for each scenario.
This approach can help demonstrate how the conversion interacts with progressive tax brackets.
It is not a recommendation to choose a particular conversion amount. Instead, it provides numerical information that can be discussed with a qualified tax or financial professional.
Benefits of Using a Roth Conversion Calculator
A Roth conversion calculator can make a complicated tax-planning concept easier to understand.
Quick Estimates
You can enter your assumptions and quickly see an estimated tax impact.
Progressive Tax Calculation
The calculator considers multiple federal brackets rather than applying one rate to the entire conversion.
Filing Status Comparison
Different filing statuses can produce substantially different bracket thresholds.
State Tax Estimate
Adding a state tax rate provides a broader estimate of the potential tax cost.
Scenario Testing
You can change the conversion amount and other inputs to examine different hypothetical situations.
Schwab Roth Conversion Calculator vs. a Complete Tax Calculation
The name Schwab Roth Conversion Calculator describes the tool's intended topic; the calculator itself states that it is not an official Schwab calculator.
It is designed as an educational estimation tool.
A complete tax calculation may involve many additional items, including:
- Adjusted gross income
- Taxable income
- Standard or itemized deductions
- Tax credits
- Capital gains
- Qualified dividends
- Retirement distributions
- Business income
- State-specific provisions
- Medicare-related considerations
- Other income adjustments
Therefore, the calculator should be viewed as a starting point for understanding the potential tax effect of a Roth conversion rather than a replacement for professional tax preparation or advice.
Frequently Asked Questions
1. What is the Schwab Roth Conversion Calculator?
The Schwab Roth Conversion Calculator on this page is an estimate tool that calculates the potential federal and state tax impact of a Roth conversion. It uses the filing status, taxable income, conversion amount, deductions, and estimated state tax rate entered by the user.
2. Is this an official Schwab calculator?
No. The disclaimer in the calculator specifically states that it is not an official Schwab calculator or tax determination. It is an independent estimation tool.
3. How is Roth conversion tax calculated?
The calculator estimates federal tax before and after adding the conversion. The difference between those two estimates is the additional federal tax attributable to the conversion under the calculator's assumptions.
4. Does a Roth conversion increase taxable income?
Generally, the taxable portion of a traditional-to-Roth conversion can be included in taxable income for the year of conversion. The exact tax treatment depends on the account and individual's circumstances.
5. Is the entire Roth conversion taxed at my marginal tax rate?
Not necessarily. Federal income tax brackets are progressive. A conversion can span multiple brackets, meaning different portions may be taxed at different rates.
6. What does effective federal tax rate on conversion mean?
It represents the estimated additional federal tax divided by the conversion amount. For example, if a $20,000 conversion produces $4,000 in additional federal tax, the effective federal rate would be 20%.
7. What is the marginal federal tax rate?
The marginal rate is the federal tax rate applicable to the next dollar of taxable income at the calculated income level. It can be higher than the effective rate because earlier portions of income may have been taxed at lower rates.
8. Can I enter a 0% state tax rate?
Yes. The calculator allows a state tax rate of 0%. This can be useful when creating a federal-only estimate or when no additional state tax is expected under the assumptions being tested.
9. What are additional taxable deductions in the calculator?
This field allows you to enter an additional deduction amount that should reduce the taxable income used by the calculator. The tool subtracts the entered amount before calculating federal tax.
10. Why does filing status matter?
Federal tax brackets differ by filing status. The calculator therefore uses different income thresholds for Single, Married Filing Jointly, Head of Household, and Married Filing Separately taxpayers.
11. Can a Roth conversion push me into a higher tax bracket?
Yes. Because a conversion generally increases taxable income, some or all of the conversion may extend into a higher marginal tax bracket. Only the portion that falls within that higher bracket is subject to that higher rate.
12. Does this calculator include Medicare effects?
No. The calculator disclaimer states that it does not account for every Medicare-related effect. A conversion can have consequences beyond the federal income-tax estimate.
13. Does the calculator include tax credits?
No. It does not account for every tax credit or tax provision. Actual tax liability may therefore differ from the calculator's estimate.
14. Can I use this calculator to determine exactly how much I should convert?
The calculator provides an estimate rather than individualized tax or financial advice. You can use it to compare hypothetical conversion amounts, but an actual conversion decision should consider your complete tax and retirement situation.
15. Should I consult a tax professional before a Roth conversion?
For a significant Roth conversion, professional advice can be valuable because the tax consequences may involve factors not included in a simplified calculator. A qualified tax professional can evaluate your complete circumstances and applicable tax rules.
Final Thoughts
The Schwab Roth Conversion Calculator provides a convenient way to estimate how a potential Roth conversion could affect federal and state taxes. By comparing taxable income and federal tax before and after a conversion, the tool illustrates the incremental tax cost rather than simply applying one percentage to the entire transaction.
The most important concept to remember is that federal income taxation is progressive. A Roth conversion may move part of your income into a higher bracket, but that does not mean the entire conversion is automatically taxed at that higher rate.
For planning purposes, consider testing multiple conversion amounts and reviewing the resulting additional federal tax, state tax, total additional tax, effective federal rate, and marginal rate. Then consider those estimates alongside your broader retirement and tax situation.
Because the calculator does not include every deduction, credit, capital-gain rule, Medicare-related effect, state-specific provision, or other tax consideration, its results should be treated as estimates. For an actual Roth conversion, consider reviewing the numbers with a qualified tax professional before completing the transaction.