Tax payment method
Learn how the Roth Conversion Calculator models outside-funds tax payment assumptions for educational tax-cost estimates.
The calculator does not model a 10% early distribution penalty when conversion taxes are assumed to be paid from outside funds.
Outside-funds tax payment means the calculator assumes conversion taxes are paid from money outside the IRA distribution.
This can make the modeled Roth conversion amount easier to compare because no part of the IRA conversion is used for tax withholding in the estimate.
The calculator still estimates federal tax, user-entered state tax, break-even timing, and projected after-tax value based on the other inputs.
Open the calculator with this tax payment method prefilled, then adjust withheld amount, age, penalty exception, income, basis, and conversion amount.
Open the calculatorThis educational page explains calculator assumptions and does not recommend a tax payment method.
This Roth Conversion Calculator is for educational and illustrative purposes only. It does NOT constitute tax, financial, legal, or investment advice. The calculation results are based on the information you provide and the latest IRS tax rules, which are subject to change. We do not guarantee the accuracy of the results. Please consult a licensed Certified Public Accountant (CPA), financial advisor, or tax professional before making any financial decisions.