Blend federal and state income tax into a single effective rate on taxable income — including how much of a Social Security benefit becomes taxable — then see how much of that rate a Roth conversion is responsible for.
This is an estimate built as a starting point for planning conversations, and it is not tax advice. The headline rate is total federal and state income tax divided by federal taxable income, Form 1040 line 15. Payroll tax is reported separately because a Roth conversion is neither FICA wages nor self-employment earnings, so including it would let a growing denominator drag the conversion's effect negative; the all-in figure including payroll is shown alongside when payroll is switched on. Social Security. The taxable portion follows the three-tier test in IRC §86. Provisional income is adjusted gross income excluding benefits, plus tax-exempt interest, plus half the gross benefit; neither threshold has ever been indexed for inflation. Married-filing-separately taxpayers are treated as having lived with their spouse during the year, which sets the base at zero. The benefit is assumed to be received for the full year, and Medicare premiums withheld from it are not modeled. State tax. State schedules are modeled from each state's own starting point — federal adjusted gross income for most states, federal taxable income for Colorado, Idaho, North Dakota, South Carolina, and Vermont — with that state's standard deduction, personal exemptions, exemption credits, Social Security treatment, and retirement-income exclusion applied. Head-of-household and married-separate filers fall back to the single-filer schedule. Local and city income taxes, itemized deductions at the state level, dependent and child credits, earned income credits, property tax credits, and alternative minimum taxes are not modeled. Where an exclusion is claimed per person, it is applied against combined household retirement income rather than tracked per spouse. Washington's capital gains excise tax is not modeled; it reaches only large long-term gains and expressly exempts retirement-account assets. State rates, brackets, deductions, and exclusion caps change often, sometimes mid-year and sometimes retroactively — several figures here are inflation-indexed amounts that had not been published when this was built. Verify against the state's Department of Revenue before relying on a number. Deductions. The additional standard deduction for taxpayers age 65 or older is available only to filers taking the standard deduction; it does not apply when itemizing. The separate senior bonus deduction of $6,000 per qualifying person age 65 or older is available either way and phases out as income rises. That provision is temporary and is scheduled to expire after 2028, so a conversion window extending beyond then would lose it in later years — which this single-year view cannot show. The senior and QBI deductions are federal, so they reach state tax only in the six states that begin from federal taxable income. Self-employment earnings are assumed to qualify in full for the 20% qualified business income deduction, phasing to zero across the 2026 threshold range. Full phase-out is the treatment for a specified service trade or business; other businesses face W-2 wage and property limits instead and may retain more of the deduction than this assumes. Investment income is not treated as QBI, and retirement plan contributions and the self-employed health insurance deduction are not modeled. Everything else. Investment income and the conversion amount are taxed here at ordinary rates, so preferential rates for qualified dividends and long-term capital gains, and the 3.8% net investment income tax, are not reflected. Payroll tax reflects the employee share of W-2 wages; self-employment earnings are taxed at both halves on 92.35% of net profit, with half the resulting tax deducted above the line. The "actual cost of the next dollar" figure is measured by adding $1,000 of ordinary income and reading the change in tax, so it captures Social Security phase-in and deduction phase-outs that the bracket table alone would miss. The conversion figure reflects the first year of the conversion window at today's income, and does not model how brackets, RMDs, or IRMAA surcharges shift across the full window. IRMAA surcharges are not calculated here at all, and they run on a two-year lookback. Figures reflect the 2026 tax year. Confirm any figure with a qualified tax professional before acting on it.