The Tax Strategy Behind Roth IRA Conversions in 2026

In this episode of The Tax Strategy Podcast, Lucas and Luna explore the strategic use of Roth IRA conversions in 2026, a year when many taxpayers face lower income due to TCJA sunsets and market volatility. Lucas explains why converting traditional IRA funds to a Roth during a down market or low-income year can lock in tax savings for life. They break down the mechanics: you pay income tax on the converted amount now, but future growth and withdrawals are tax-free. Lucas highlights the 'tax bracket arbitrage' opportunity — converting just enough to fill up the 12% or 22% bracket without pushing into the next tier. Luna raises the crucial consideration of the five-year rule and the Medicare surtax for high earners. They also discuss the pro-rata rule for those with after-tax IRA contributions and the risk of triggering the net investment income tax. The episode walks through a concrete example: a single taxpayer earning $60,000 who converts $20,000 and pays roughly $4,400 in tax versus potentially saving over $30,000 in future taxes if the account grows. Lucas emphasizes that Roth conversions are especially powerful before RMDs begin and when market values are low. Tune in to learn if a Roth IRA conversion makes sense for your 2026 tax plan. #RothIRAConversion #TaxStrategy #RetirementPlanning #IRARules #TaxBracketArbitrage #ProRataRule #FiveYearRule #NIIT #MedicareSurtax #RothIRA #TraditionalIRA #TaxPlanning #2026Taxes #TCJASunset #Finance #PersonalFinance #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo