2026 Tax Brackets: The Exact Income Where a Roth Conversion Stops Paying Off

The full 2026 MFJ federal tax bracket table

These are the finalized 2026 rates under IRS Rev. Proc. 2025-32. The One Big Beautiful Bill Act (OBBBA, signed July 2025) made the TCJA individual rates permanent — no sunset, no reversion to pre-2018 rates. Every dollar figure below is taxable income (gross income minus the standard deduction or itemized deductions).

Standard deduction (2026 MFJ): $32,200. Each spouse age 65 or older adds $1,650. The OBBBA’s temporary senior bonus deduction adds another $6,000 per qualifying spouse (2025–2028 only), phasing out at $150,000–$250,000 MFJ MAGI. Source: IRS Rev. Proc. 2025-32 §2.15/§2.14; OBBBA § 70103.

What you actually owe at four income levels

The bracket table is progressive — only the income inside each bracket is taxed at that rate. Here is the math at four common MFJ household incomes, assuming the standard deduction of $32,200 and no other above-the-line deductions.

Notice the gap between marginal and effective rates. The couple at $150,000 gross pays a 22% marginal rate but only 10.2% effective — because $24,800 was taxed at 10% and $76,000 at 12% before any dollar hit 22%. This gap is why marginal rates mislead: a $50,000 Roth conversion at the 22% marginal rate costs $11,000 in tax, but the couple’s overall effective rate barely moves.

Why OBBBA matters: the rates you are not paying

Without the OBBBA extending TCJA, the 2026 MFJ brackets would have reverted to pre-2018 rates. The 12% bracket would have become 15%. The 22% bracket would have become 25%. The 24% bracket would have become 28%. Every MFJ household earning over $24,800 taxable would have paid more.

For a couple at $150,000 gross ($117,800 taxable), the pre-TCJA system would have produced roughly $18,500 in federal tax versus the $15,340 they actually owe — a difference of about $3,160 per year. At $250,000 gross, the difference widens to roughly $6,200. The OBBBA extension is not a tax cut from today — it is the absence of a tax increase that was scheduled to hit January 1, 2026.

Decision tree: where does a Roth conversion pay off at your bracket?

A Roth conversion moves money from a Traditional IRA or 401(k) into a Roth IRA. You pay ordinary income tax on the converted amount now, but qualified Roth withdrawals are tax-free for life — no RMDs, no IRMAA impact, no Social Security taxation trigger. The question is whether the rate you pay today is lower than the rate you would pay later.

Branch 1: You are in the 10% or 12% bracket (MFJ taxable income under $100,800)

Convert aggressively. Nearly every retiree with a meaningful pre-tax balance will face a marginal rate above 12% once RMDs, Social Security, and pension income stack up. At age 73, an MFJ couple with $1.8M in Traditional IRAs faces an RMD of roughly $67,924 (using the 26.5 Uniform Lifetime divisor from IRS Pub. 590-B). Add $72,000 in combined Social Security, and taxable income alone is $140,000 — solidly in the 22% bracket before any other source. Every dollar you convert at 12% that would otherwise come out at 22% saves you 10 cents per dollar, permanently.

The ceiling: fill the 12% bracket up to $100,800 MFJ taxable. If your baseline taxable income (wages, SS, pension) is $40,000, you have $60,800 of Roth-conversion headroom in the 12% bracket. Tax cost: $7,296. Future savings if those dollars would have been taxed at 22%: $13,376 — a net gain of $6,080.

Branch 2: You are in the 22% bracket (MFJ taxable $100,801–$211,400)

Convert selectively. The 22% bracket is the sweet spot for high-balance pre-tax savers ($1M+ in Traditional accounts). If your projected RMDs plus Social Security will push you into the 24% bracket or trigger IRMAA surcharges, converting at 22% is still a net win. But the margin is thinner than the 12% bracket, and you need to factor in IRMAA cliffs.

A conversion that pushes your MAGI above $218,000 (MFJ) triggers Tier 1 IRMAA — an extra $1,148 per person per year in Medicare surcharges. If you are converting $50,000 and that tips you from $215,000 to $265,000 MAGI, the IRMAA cost two years later ($2,296 for a couple) partially offsets the bracket-arbitrage gain. Size conversions to stay below $218,000 MAGI unless the long-term RMD reduction justifies the IRMAA hit.

Branch 3: You are in the 24% bracket (MFJ taxable $211,401–$403,550)

Pause and model. At 24%, conversion only pays off if your future marginal rate — including the combined effects of RMDs, Social Security taxation (up to 85% of benefits are taxable above $44,000 combined income MFJ), and IRMAA — exceeds 24%. That is possible for households with $2M+ in pre-tax accounts who will face large RMDs at 73 or 75. But for most couples with $500K–$1M in pre-tax money, the future rate will be 22% or lower, and converting at 24% is a net loss.

The exception: if you are in the gap years between retirement and age 73 (or 75 for those born 1960+) with temporarily low income, you may be in the 24% bracket only because of a one-time capital gain or consulting income. Check whether your structural income (SS + pension + expected RMDs) actually lands you at 24%. If it does not, the conversion headroom is in the brackets below.

Branch 4: You are in the 32% bracket or above (MFJ taxable $403,551+)

Converting at 32%+ rarely wins on bracket math alone. Very few retirees face a marginal rate above 32% from RMDs and Social Security. At this level, the value of Roth conversion shifts from bracket arbitrage to estate planning (leaving heirs tax-free Roth assets) and IRMAA avoidance over a long horizon. If you are 55 with $3M+ in pre-tax accounts and expect 20+ years of compounding before RMDs, a partial conversion at 32% can still be net-positive — but model it year by year, not on a napkin.

Worked example: $150K couple in the gap years

An Atlanta couple, both age 66, retired at 65. Combined Social Security (started at FRA): $0 for now — they are delaying to 70 for the 32% permanent increase. Current income: $30,000 from brokerage dividends plus $15,000 from a part-time consulting wind-down. Gross income: $45,000. Standard deduction: $32,200 plus $3,300 in additional age-65 deductions ($1,650 each). Taxable income: $9,500.

They are in the 10% bracket with $15,300 of headroom before hitting 12%, and another $76,000 of headroom in the 12% bracket. Total Roth-conversion room at 12% or below: $91,300.

Their Traditional IRA balances: his $1.2M, hers $400K. At age 73, his RMD alone is $60,377 ($1.6M projected balance / 26.5). Add $72,000 in combined delayed Social Security and taxable income jumps to $132,377 — the 22% bracket. Every dollar they convert now at 10–12% avoids 22% later. Converting $91,300 per year for four gap years (ages 66–69) moves $365,200 to Roth and saves roughly $36,520 in lifetime federal tax (10% bracket arbitrage on the full amount).

The OBBBA senior bonus deduction ($12,000 for the couple, both 65+) makes this even more attractive — it creates an additional $12,000 of above-the-line deduction that further lowers their baseline taxable income and expands conversion headroom. But it phases out above $150,000 MFJ MAGI at a 6% rate, so conversions that push MAGI past $150,000 start losing the bonus.

The hidden costs that change the math

Bracket-to-bracket comparisons are necessary but not sufficient. Three additional costs can flip the Roth-conversion decision:

1. IRMAA cliffs. A Roth conversion adds to MAGI in the year of conversion. If that pushes 2026 MAGI above $218,000 MFJ, the couple pays Tier 1 IRMAA on their 2028 Medicare premiums — an extra $1,148 per person per year. The IRMAA cost is a two-year-lagged penalty on conversion-year income.

2. Social Security taxation. Up to 85% of Social Security benefits become taxable once combined income exceeds $44,000 MFJ. A large Roth conversion in a year when you are also receiving SS can push more of those benefits into taxable territory, raising your effective rate beyond the marginal bracket.

3. ACA premium subsidies. For couples under 65 on marketplace health insurance, Roth-conversion income raises MAGI and can reduce or eliminate premium tax credits. A $40,000 conversion that pushes MAGI from $60,000 to $100,000 could cost $8,000+ in lost subsidies — an effective marginal rate far above the 12% bracket rate.

Your next step depends on which branch matched you

If you are in the 10–12% bracket with pre-tax balances above $500K: this is the clearest Roth-conversion opportunity in the tax code. Calculate your conversion ceiling (top of the 12% bracket at $100,800 MFJ taxable minus your baseline taxable income) and convert up to that amount before December 31. Roth conversions have a hard calendar-year deadline — no April 15 extension.

If you are in the 22% bracket and nearing RMD age: model your projected RMDs at 73 or 75. If RMDs plus SS push you to 24% or trigger IRMAA, converting at 22% while staying below the $218,000 MFJ IRMAA cliff is the right move. Factor in the two-year IRMAA lookback.

If you are in the 24% bracket or above: the conversion math gets personal. You need a multi-year income projection, not a rule of thumb. Model the RMD trajectory, the SS taxation interaction, and the IRMAA impact for at least 10 years forward.

If you are in the gap years (retired, pre-SS, pre-RMD): this is the most valuable window in retirement tax planning. Every year of low-bracket conversion reduces future RMDs and the tax drag they create. Do not waste these years.