Retirees Have Until Dec. 31 to Fill the 12% Bracket With a Roth Conversion.
Most Fill It With Nothing
Quick Read – Married retirees can report roughly $133,000 in gross income before hitting the 22% bracket, leaving most households with tens of thousands in unused Roth conversion space. – A couple with $40,000 in taxable income could convert $60,000 to a Roth at 12% now, avoiding a potential 22% rate on the same funds withdrawn later. – Roth conversions must settle before December 31, because unused 12% bracket space expires permanently on January 1 and cannot roll forward. – The 12% federal tax bracket is unusually wide, and for most retirees, it is unusually empty. For a married couple filing jointly in 2026, taxable income from $24,800 to $100,800 falls within it. Layer on the standard deduction of $32,200, and that couple can report roughly $133,000 of gross income before any dollar crosses into the 22% bracket.
Single filers get their own runway, with the 12% band running from $12,400 to $50,400, plus a $16,100 standard deduction. Every dollar moved from a traditional IRA to a Roth IRA is treated as ordinary income in the year of the conversion. The IRS treats the deadline as fixed, so a conversion recorded on December 31 falls within this tax year, while one recorded on January 1 falls within the next.