Key Points
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Roth IRA conversions require you to pay taxes on your funds in the year you convert them.
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The new senior tax deduction reduces your taxable income by up to $6,000 if you qualify.
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This can offset some of the tax increase you may face from doing a Roth IRA conversion this year.
Roth IRA conversions are a great way to shield your retirement savings from future taxes. But to do this, you have to pay taxes on the converted funds today. This could increase your tax bill and may even push you up to the next tax bracket.
However, 2026 presents a rare opportunity for seniors to do Roth IRA conversions without paying a huge price for it at tax time. Here’s why you may want to consider it.
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2026 marks the second year of the new senior tax deduction, worth up to $6,000 for qualifying single adults and up to $12,000 for qualifying married couples. You must be 65 or older and have a valid Social Security number to claim this deduction. You must also have a modified adjusted gross income (MAGI) of $75,000 or less for single adults, or $150,000 or less for married couples to claim the full deduction.
Essentially, this reduces your taxable income by up to $6,000. If you were to convert $6,000 of your traditional IRA or 401(k) funds to a Roth IRA this year, your tax bill will look pretty similar to what it has in years past because the deduction cancels out the extra taxes from the conversion.
After you’ve paid taxes on the $6,000 you’re converting, that money grows tax-free. You can leave it in your Roth IRA as long as you’d like, and when you take it out, you won’t owe any taxes on your earnings.
The senior tax deduction is currently set to remain in place through the 2028 tax year, so the next few years are a great time to do some Roth IRA conversions if you’ve been thinking about them. We can’t be sure the deduction will remain in place in 2029, so act now if you want to take advantage of this savings opportunity while it’s available.
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