09/01/2026
If you are 65 or older and thinking about a Roth conversion this year, there is a bracket that does not appear on any tax chart.
Taxpayers 65 and older get a $6,000 deduction each in 2026. It shrinks by 6% of every dollar of income above $150,000, so for a couple where both spouses are 65 or older the clawback runs at 12% combined and the full $12,000 is gone by $250,000.
Inside that band, every dollar you convert adds a dollar of income and destroys twelve cents of deduction. Taxable income rises by $1.12 for every $1.00 converted. Multiply by the 22% statutory rate and the real cost is 24.6%.
A couple at $180,000 converting $40,000 sees taxable income rise $44,800, not $40,000. The federal tax on that is $9,856.
The money has to settle in the Roth by December 31, and custodians back up badly in the final weeks, so the decision window is October and November.
Full breakdown, including the Medicare lookback and what Arizona's flat 2.5% changes: https://www.goldenacrewealth.com/notebook/roth-conversion-sizing-2026
