The 2026 State Tax Brackets are now fully integrated into the Roth IRA Conversion Optimizer. This update completes the tax‑aware engine for the 2026 planning year and ensures that every projection, scenario, and Monte Carlo simulation reflects the most accurate tax landscape available.
For users who rely on the Optimizer to make informed Roth conversion decisions, this update brings the entire federal and state tax picture into alignment, giving you a complete, end‑to‑end view of how conversions affect lifetime taxes, retirement income, and long‑term net worth.
What’s New: 2026 State Tax Brackets
Many states release their tax brackets later than the IRS. Now that all the states have published their 2026 brackets, the Optimizer incorporates these new brackets into the tax calculations along with adjustments for inflation in the future years.
This ensures that your conversion strategy is based on the most current state tax information available.
A Reminder of Everything the Optimizer Handles for You
The Roth IRA Conversion Optimizer isn’t just a conversion calculator. It is a full tax‑aware planning engine that models how every dollar of income interacts with federal and state tax systems over time, producing accurate long‑term forecasts that support smarter retirement decisions.
Here’s a quick refresher on the other tax components built into the tool:
State and Federal Income Tax Brackets
The Optimizer uses the official 2026 tax tables for the most common filing statuses (MFJ, Single, and HoH), including:
- Ordinary income brackets
- Federal standard deductions
- Inflation adjustments
Every scenario you run reflects the state and federal tax owed for each year of retirement.
Social Security Taxation
The Optimizer models:
- Provisional income
- 0%, 50%, and 85% taxation tiers
This ensures the model doesn’t overtax Social Security in your lower income retirement years.
Long‑Term Capital Gains (LTCG) Brackets
Conversions can push you into higher LTCG brackets. The Optimizer tracks:
- 0%, 15%, and 20% LTCG tiers
- Interaction with ordinary income
- NIIT thresholds
This helps you avoid “accidental” capital gains tax increases.
Net Investment Income Tax (NIIT)
The Optimizer includes:
- The 3.8% NIIT
- MAGI thresholds
- Interaction with conversions and RMDs
This enables high‑income households and retirees to minimize extra investment taxes.
Medicare Premiums (IRMAA)
Roth conversions can trigger higher Medicare premiums. The Optimizer models:
- Part B and Part D premiums with IRMAA brackets
- Two‑year lookback rules
- Annual inflation adjustments
This allows you to avoid IRMAA “cliffs” that can add thousands to your healthcare costs.
Early Withdrawal Penalties
For early retirees, the Optimizer understands:
- 10% early withdrawal penalties
- 72(t) SEPP exceptions
- Rule of 55 exceptions
This makes the tool uniquely powerful for FIRE‑oriented users.
After‑Tax IRA Contribution Support
The Optimizer handles:
- Basis tracking
- Pro‑rata rule tax calculations
This ensures your conversion strategy is accurate even if your IRA contains both pre‑tax and after‑tax dollars.
Why This Matters for Your 2026 Planning
With both federal and state tax systems now fully updated for 2026, you can:
- Run accurate Roth conversion scenarios
- Compare multi‑year strategies
- Avoid penalties and tax cliffs
- Minimize lifetime taxes
- Improve long‑term after‑tax wealth
- Stress‑test your plan with Monte Carlo simulations
Whether you’re an individual investor or a financial advisor, the Optimizer gives you a complete, tax‑aware view of your retirement strategy for the years ahead.