PART 3 — Roth Conversions Before 2026: Why Doctors Should Act Now
From the series: Are You Ready for 2026? The Top 20 Year-End Tax Tips to Maximize Your 2025 Deductions & Credits
There’s a moment every doctor has when they first hear about Roth conversions.
It’s usually the same reaction:
“Wait… so I move money from pre-tax to Roth… pay tax once… and it grows tax-free forever? Why didn’t anyone tell me this earlier?”
It’s a fair question.
Because Roth conversions are one of the most powerful tax moves available to physicians.
But the window to use them effectively is shrinking.
And once 2026 arrives, the math changes for everyone.
So let’s talk about why 2025 may be your best chance to convert — and how to do it without making expensive mistakes.
Why Roth Conversions Matter for Physicians
Physicians live in high brackets.
Your income jumps.
Your hours shift.
Your bonuses hit at weird times.
Your side income grows faster than planned.
And suddenly you’re staring at a tax bill that doesn’t match the work you did.
A Roth conversion gives you control.
You choose how much income to “recognize.”
You decide when it happens.
You decide how much tax you’re willing to pay.
And you decide which bracket the conversion fills.
That level of control is rare.
And it works well for physicians because your income often fluctuates between tax years.
Why 2025 Is Special
Let’s talk about the part most doctors haven’t been told clearly:
Tax brackets rise in 2026.
Not maybe.
Not possibly.
They rise.
The current lower rates expire.
This means:
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Roth conversions become more expensive after 2025
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Your income will be taxed at higher brackets
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Your room to “fill lower brackets” shrinks
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The future cost of converting increases
In plain terms:
You’re temporarily living in a discount conversion period.
And it ends soon.
How Roth Conversions Work for Physicians
Here’s the simple version:
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You move money from pre-tax (traditional IRA, SEP IRA, rollover IRA)
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Into a Roth IRA
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You pay tax on the moved amount
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But the growth becomes tax-free forever
That’s it.
Simple enough on paper.
But the details matter.
Especially if you’re a high-earning physician.
The Best Time to Convert as a Physician
You want to convert when:
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Your income is lower
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Your hours dropped
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You took time off
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You stopped moonlighting
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You paused locums
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You had fewer bonuses
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Your spouse had lower income
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Your business slowed temporarily
Or — and this is common —
When the market is down and your pre-tax account is “on sale.”
Doctors rarely get “low income” years.
But you might get a lower year.
Or you might be in a temporary dip.
Or you might still be inside today’s relatively low brackets.
That’s when converting makes sense.
Avoid the Pro-Rata Trap
This is the rule that surprises physicians the most.
If you have any pre-tax IRA money —
Traditional, SEP, SIMPLE, rollover IRAs —
Your Roth conversion becomes taxable across all those accounts.
This is the mistake many physicians make.
And they don’t know until April.
You want a “clean” IRA before you convert.
Here’s how doctors fix this:
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Roll pre-tax IRAs into a 401(k)
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Roll SEP IRAs into a Solo 401(k)
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Move SIMPLE IRAs after the required two-year window
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Consolidate accounts before December 31
The deadline matters.
The IRS checks your IRA balance on December 31.
Not January.
Not February.
Year-end only.
This is one of the most important steps.
Pair Roth Conversions with Other Physician Tax Strategies
Roth conversions rarely stand alone.
They work best when combined with moves you may already be making.
Here are the strongest pairings:
1. Tax-Loss Harvesting
Convert while harvesting losses.
This offsets gains.
And softens the tax hit.
Start with this guide:
market losses tax-saving opportunities.
2. Extra 1099 Deductions
If you earn self-employed income:
CME, travel, equipment, home office, and other business deductions can offset the added income from a conversion.
See what counts:
1099 contractor tax guide.
3. Cash Balance Plans
A big deduction gives you breathing room to convert more.
Contribute heavily.
Convert strategically.
And stay under a preferred bracket.
This works well for high earners using:
doctor tax-saving strategies.
4. Business Travel Deductions
If you traveled for CME or mixed personal-business trips this year, these deductions lower taxable income — giving conversions more room.
Learn how:
business vacation deductions.
5. State Tax Planning
State brackets matter more when you’re adding taxable income.
If you’re in CA, NY, NJ, or another high-tax state, review this:
high state income taxes for physicians.
All of these amplify your Roth strategy.
Why Roth Dollars Matter for Physicians Later
Here’s the part that feels small today but huge later:
Roth dollars give you:
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Tax-free retirement income
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Lower RMD pressure
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Lower Medicare surcharges
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Better control over withdrawal strategies
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More flexibility in early retirement
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A cleaner estate plan
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A hedge against rising future tax rates
The same conversion that feels “expensive” now often feels like a bargain later.
Your Year-End Roth Conversion Checklist
Use this simple list:
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Check your income level
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Estimate your tax bracket
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See if you’re lower than usual
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Review your IRA balances
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Clean pre-tax IRA funds into a 401(k)
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Decide how much income you want to convert
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Compare 2025 rates to 2026 rates
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Harvest market losses for offset
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Add final 1099 deductions
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Coordinate with retirement contributions
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Convert before December 31
A good Roth conversion is intentional.
Not random.
FAQ — Roth Conversions for Physicians in 2025
1. Should I convert everything at once?
Not usually.
Most physicians convert in layers.
Bracket by bracket.
2. Is converting in 2025 better than 2026?
Yes for most doctors.
2026 brackets rise.
3. Does a conversion affect my ability to deduct 1099 expenses?
No.
Those deductions still apply.
4. If I’m in a high-tax state, should I still convert?
Maybe.
But you need to run state-specific numbers.
5. Do conversions impact my Roth IRA contribution limits?
No.
They’re completely separate.
Ready to talk strategy? Start here.
Visit contact physiciantaxsolutions.com to schedule a consultation and learn how we can help you take control of your tax strategy today.
This post serves solely for informational purposes and should not be construed as legal, business, or tax advice. Individuals should seek guidance from their attorney, business advisor, or tax advisor regarding the matters discussed herein. physiciantaxsolutions.com assumes no responsibility for actions taken based on the information provided in this post.