IRA Rollover Tax Calculator
Calculate the tax impact of rolling over or converting retirement accounts. Compare Traditional-to-Roth conversion costs, break-even timelines, and projected values at 5, 10, 15, 20, and 25 years for both stay-put and convert scenarios — free and private.
How IRA Rollovers and Conversions Work
An IRA rollover is the transfer of retirement funds from one account to another — for example, moving a 401(k) to a Traditional IRA after leaving an employer, or converting a Traditional IRA to a Roth IRA. There are two methods: a direct rollover (trustee-to-trustee transfer, no taxes withheld) and an indirect rollover (you receive the funds personally and must redeposit within 60 calendar days). With an indirect rollover from an employer plan, 20% mandatory federal withholding applies — you must make up the difference from other funds or the withheld amount is treated as a taxable distribution. The IRS limits indirect IRA-to-IRA rollovers to one per 12-month period per taxpayer (not per account), though direct rollovers and Roth conversions are unlimited. Source: IRS.gov — Rollovers of Retirement Plan and IRA Distributions. Last updated May 2026.
Roth Conversion Tax Rules for 2026
When you convert pre-tax retirement funds (Traditional IRA, 401k, 403b, SEP, or SIMPLE IRA) to a Roth IRA, the converted amount is added to your ordinary taxable income for that year. Under the One Big Beautiful Bill Act (OBBB) passed in 2025, the 2026 federal tax brackets are: 10% (up to $11,925 single / $23,850 MFJ), 12% ($11,926-$48,475 / $23,851-$96,950), 22% ($48,476-$103,350 / $96,951-$206,700), 24% ($103,351-$197,300 / $206,701-$394,600), 32% ($197,301-$250,525 / $394,601-$501,050), 35% ($250,526-$626,350 / $501,051-$751,600), and 37% (above those amounts). The pro-rata rule applies if you have both pre-tax and after-tax (nondeductible) IRA contributions: you cannot convert only the after-tax portion — the IRS calculates the taxable percentage based on the ratio of pre-tax to total IRA balances across all your Traditional, SEP, and SIMPLE IRAs. Source: IRS Publication 590-A.
When a Roth Conversion Makes Sense
A Roth conversion is most advantageous when your current tax rate is lower than your expected rate in retirement. Common optimal scenarios include: early career years before peak earning (e.g., ages 25-35 when income is lower); gap years between jobs or during a sabbatical; the years between early retirement and Social Security (ages 55-70 when taxable income may be minimal); years with large deductions (medical expenses, business losses, charitable contributions) that reduce your effective rate; and after market declines when account values are temporarily depressed — converting a $100,000 IRA that has dropped to $70,000 means paying tax on $70,000 instead of $100,000. The break-even analysis in this calculator shows exactly how many years of tax-free Roth growth it takes to recoup the upfront conversion tax cost.
Common Rollover Mistakes to Avoid
The most expensive rollover mistakes involve timing and rules. First, the 60-day deadline for indirect rollovers is absolute — missing it by even one day means the entire amount is treated as a taxable distribution, plus a 10% early withdrawal penalty if you are under age 59 and one half. Second, the one-per-year rule for indirect IRA-to-IRA rollovers means a second indirect rollover within 12 months is fully taxable. Third, SIMPLE IRA rollovers to non-SIMPLE accounts trigger a 25% penalty if done within the first two years of SIMPLE participation (reduced to 10% after two years). Fourth, if your 401(k) holds appreciated employer stock (Net Unrealized Appreciation, or NUA), rolling it to an IRA forfeits the NUA tax advantage — the stock's gain would have been taxed at capital gains rates if distributed directly, but inside an IRA it becomes ordinary income. Always consult a tax professional before executing large rollovers. Source: IRS.gov — Rollovers and Roth Conversions FAQs.