For about two years, retirees heard the same warning from almost everyone with a microphone or a newsletter. Convert your IRA money to a Roth now, the line went, because tax rates are scheduled to jump at the end of 2025, and you want to pay today's lower rate while you still can. It was on the radio, in the personal finance columns, and in plenty of advisor meetings. From the conversations our advisors have, more than a few people felt genuinely pressured by it, like a countdown clock was ticking on their retirement.
Here is the part that did not get nearly as much airtime: that clock stopped. And if you made decisions, or are about to, based on a deadline that no longer exists, it is worth understanding exactly what changed.
Do I still need to rush my Roth conversion before tax rates go up in 2026?
No. The tax increase that was driving that urgency was canceled. On July 4, 2025, the One Big Beautiful Bill Act was signed into law, and it made the lower income tax rates from the 2017 tax law permanent. The scheduled jump never happened. So the "do it before rates rise" reason to rush is gone. The reasons a Roth conversion can still be smart for you personally have not changed at all, and that distinction is the whole point of this article.
What the old deadline was actually about
The 2017 Tax Cuts and Jobs Act lowered tax rates, but it did something unusual for the individual side of the tax code: it gave those lower rates an expiration date of December 31, 2025. Left alone, the brackets were set to revert at the start of 2026, and the top rate alone was scheduled to climb back to 39.6 percent from 37 percent. That looming reversal is what created the famous "convert before the sunset" window. The advice was not wrong at the time. It was built on a deadline that was genuinely on the calendar.
The One Big Beautiful Bill Act erased that deadline. According to the Tax Foundation's summary of the law, it "permanently preserves the lower ordinary income tax rates and adjusted bracket widths from the TCJA," and the top rate stays at 37 percent rather than rising to 39.6 percent. The seven brackets that everyone was racing to beat are now the law going forward, not a temporary courtesy.
What the 2026 numbers actually look like
Because the rates held, the IRS simply adjusted the 2026 brackets for inflation rather than resetting them higher. For a married couple filing jointly, the 37 percent top rate does not begin until income passes $768,700. The standard deduction for 2026 rises to $32,200 for married couples filing jointly, $16,100 for single filers, and $24,150 for heads of household. These are not the higher-tax numbers people were bracing for. They are a continuation of the lower-tax environment, now without an end date attached.
Why this changes the urgency, not the strategy
Here is the trap to avoid. "The deadline disappeared" is not the same sentence as "Roth conversions stopped making sense." Those are two very different ideas, and confusing them costs people real money in both directions.
A Roth conversion can still be one of the most powerful moves in a retirement plan, and the reasons have nothing to do with a sunset:
- Shrinking future required minimum distributions. Money you move to a Roth is no longer subject to RMDs, so you lower the forced, taxable withdrawals that hit later and can push you into a higher bracket against your will.
- Managing Medicare premium surcharges. Your income from two years back determines whether you pay the IRMAA surcharge on your Medicare premiums. Thoughtful conversions, sized carefully, can keep a lifetime of that income under control rather than spiking it.
- Protecting the surviving spouse. When one spouse passes, the survivor often files as a single taxpayer, where the same income is taxed at higher rates. Roth dollars are not exposed to that shift.
- Leaving a cleaner inheritance. Heirs who inherit a traditional IRA generally must drain it within ten years and pay income tax along the way, often during their own peak earning years. Most non-spouse heirs still face that same ten-year window on an inherited Roth, but the difference is real: what they withdraw comes out income-tax-free.
None of those reasons needed a deadline. They are about your math: your bracket today, your projected bracket later, your Medicare picture, and what you want to leave behind. What changed on July 4, 2025 is that you now get to make that decision on a calm, multi-year schedule instead of under a ticking clock. For most retirees with real assets, that is a gift, because the smartest conversions are usually spread across several years to fill up the lower brackets without spilling into the higher ones.
The deadline that is still very real
There is one piece of this that did not get easier, and it deserves a bold warning. Once you convert money to a Roth, you cannot undo it. The IRS is direct about this: "Effective January 1, 2018, pursuant to the Tax Cuts and Jobs Act, a conversion from a traditional IRA, SEP or SIMPLE to a Roth IRA cannot be recharacterized." Before 2018, you could reverse a conversion if it turned out to be a mistake. That escape hatch is permanently closed.
So the conversion itself is irreversible, even though the rate pressure is gone. That is exactly why the right move is to measure twice. A conversion that is too large in a single year can quietly trigger a higher Medicare surcharge two years down the road, and there is no taking it back once the money has moved. The disappearance of the sunset gives you the time to get the size right. Use it.
One genuinely new wrinkle worth knowing
The same law added a temporary bonus deduction for older taxpayers. For tax years 2025 through 2028, taxpayers age 65 and older can claim an extra $6,000 deduction per qualifying person. It phases out as income rises above $75,000 for single filers and $150,000 for joint filers, and disappears entirely at $175,000 and $250,000 respectively. For couples in that income band, that is a real planning window, and notably one that does have an expiration date in 2028. The irony is not lost on us: the deadline everyone worried about vanished, and a smaller, quieter one took its place.
The bottom line
If you converted aggressively in 2024 or 2025 because you believed rates were about to climb, you did not do anything foolish; you acted on the best information available, and lower rates are still a fine reason to have paid tax. But if you are sitting down to plan the next few years, throw out the countdown clock. The decision is no longer "beat the deadline." It is "what does my own situation call for, and over how many years should I do it." That is a better question, and now you have the time to answer it properly.
Common questions
Did the Trump tax cuts expire in 2026?
No. The lower individual rates from the 2017 Tax Cuts and Jobs Act were scheduled to expire at the end of 2025, but the One Big Beautiful Bill Act, signed July 4, 2025, made them permanent. The top rate stays at 37 percent instead of rising to 39.6 percent.
Is there still a deadline to do a Roth conversion in 2026?
There is no longer a rate-driven deadline. The tax increase that created the "convert before 2025" urgency was canceled. You can now spread conversions across several years based on your own situation rather than racing a clock.
Does a Roth conversion affect your IRMAA Medicare premiums?
Yes. A conversion adds to your taxable income, and your income from two years prior determines your IRMAA Medicare premium surcharge. A conversion that is too large in one year can quietly raise your Medicare premiums two years later, which is why sizing it carefully matters.
Can you undo a Roth conversion?
No. The IRS states that effective January 1, 2018, a conversion to a Roth IRA cannot be recharacterized. Once the money is moved and the tax is owed, the decision is permanent, so it is worth getting the amount right before you convert.
This is the kind of planning that is hard to do well on the back of a napkin, because the conversion, the Medicare surcharge, the surviving-spouse math, and the legacy all move together. If you want a second set of eyes on whether, and how much, to convert in your situation, that is a conversation our team at American Retirement Advisors has every week. You can reach us at 602-281-3898.
Disclaimer: The information in this article is for educational purposes only and does not constitute tax, legal, or investment advice. Tax laws change frequently, and individual circumstances vary. American Retirement Advisors does not provide tax or legal services. Before making any tax-related decisions, consult a qualified CPA, tax attorney, or financial planner who can evaluate your specific situation.