Our Conversion Calculator is an informational tool that you can use to compare the outcomes of various hypothetical scenarios based on data that you enter. While we've tried to make the Calculator as helpful as possible, it's not intended to provide you with tax, legal, or investment advice, or to offer recommendations on how you should proceed. You should consult a tax, legal, or investment professional for help with your IRA decisions. To find out how you can talk to an H&R Block tax professional, click the Ask a Tax Advisor button.
We've used a number of assumptions in arriving at the results shown in the Conversion Calculator. Your actual results may differ significantly from the results predicted by the Calculator.
We use the following assumptions in the Conversion Calculator:
To compute the estimated after-tax value of your traditional IRAs without conversion, we start with the pre-conversion value of your IRAs. We assume that amount grows on a tax-deferred basis at the designated annual rate of return and is then paid out in a single taxable lump sum at the end of the period you've indicated.
To compute the estimated after-tax value of your IRAs after conversion, we add together the after-tax value of your Roth IRA and the unconverted portion of your traditional IRA. To make the analysis fair if you've paid the conversion tax with non-IRA funds, we then subtract out an amount which reflects the result you would have obtained if you had invested the conversion tax in a taxable account earning the annual rate of return you specify over the accumulation period you specify. We assume that your IRAs grow on a tax-deferred basis at the specified annual rate of return and that each is paid out to you in a single lump sum at the end of the period you've indicated. We assume that your withdrawal from the Roth IRA is completely tax-free and that you aren't subject to any early withdrawal or other penalty taxes.
We assume that your federal tax rate stays the same throughout the entire period that the funds are held in your IRAs and that you pay taxes on December 31st of the year of withdrawal.
We do not take into account any state or local taxes or any early withdrawal penalties.
For the year of conversion, we assume that the conversion withdrawals are the only withdrawals that you receive from your traditional IRAs.
We do not take inflation into account.
In some cases, your entries may result in amounts too large for the Conversion Calculator to handle. In that case, we blank out the line that would otherwise the display the result in question.