Roth Conversion & Capital Gains Headroom Planner

1. 1.Split your income

   Earned income, ordinary dividends and interest, and a planned conversion count as ordinary income. Qualified dividends and long-term gains are preferential, taxed on their own schedule.

   ordinary = earned + ordinary_dividends_interest + roth_conversion
   preferential = qualified_dividends + long_term_gains

2. 2.Estimate MAGI and your poverty-level percentage

   AGI is both income types plus the taxable part of any Social Security. Marketplace MAGI adds back untaxed Social Security, tax-exempt interest and excluded foreign income. Divide by the poverty level to get your FPL percentage.

   agi = ordinary + preferential + taxable_social_security
   magi = agi + untaxed_social_security + tax_exempt_interest + excluded_foreign_income
   fpl_percent = magi / fpl x 100

3. 3.Measure each ceiling

   MAGI headroom is your guardrail, the poverty level times your chosen percent, minus MAGI. Bracket room is the 24% threshold plus the standard deduction, minus ordinary income and taxable Social Security. Gains room is the 0% ceiling minus taxable income.

   magi_headroom = fpl x guardrail_percent - magi
   bracket_room = threshold_24 + standard_deduction - (ordinary + taxable_social_security)
   gains_room = ltcg_ceiling - (agi - standard_deduction)

4. 4.Take the binding constraint

   Extra room for each move is the smaller of its tax ceiling and your MAGI headroom, never below zero. When MAGI headroom runs out, both are zero however much bracket or gains room is left.

   roth_room = max(0, min(magi_headroom, bracket_room))
   gains_room_extra = max(0, min(magi_headroom, gains_room))

1. Ordinary income is $12,125 + $1,000 + $8,000 = $21,125, and preferential income is $3,000 + $15,000 = $18,000. AGI and Marketplace MAGI are both $39,125.
2. The 2025 poverty level for one person is $15,650, so a 250% guardrail puts the ceiling at $39,125. That's exactly your MAGI: $0 of headroom, 250.0% of FPL, and a Near limit verdict.
3. Taxable income is $39,125 less the $16,100 standard deduction, or $23,025. That leaves $26,425 of 0% gains room under the $49,450 ceiling, and $100,675 of room before the 24% bracket.
4. Room to convert or harvest is still $0, because MAGI is the binding constraint. $1,000 more conversion lifts MAGI to $40,125 (256.4% of FPL) and $10,000 more gains lifts it to $49,125 (313.9%). Both read Above guardrail.

Judged on tax brackets alone, this filer has six figures of conversion room and $26,425 of free gains. Judged against a 250% guardrail, they have nothing left this year.

• Federal only. State income tax and state Marketplace rules aren't modeled, and state tax can change a conversion decision outright.
• The standard deduction is assumed. Itemized deductions, adjustments, QBI and self-employment tax aren't included, so real bracket and gains room can differ.
• Marketplace MAGI is an approximation, and the real determination uses household and reconciliation rules this tool doesn't attempt. Bracket room measures one planning threshold, the 24% bracket.
• Not modeled: net investment income tax, IRMAA on future Medicare premiums, the additional Medicare tax, AMT and future required minimum distributions.
• Figures follow the 2026 thresholds and 2025 poverty guidelines, and ACA rules keep changing. Verify before acting, and confirm any conversion with a tax professional. This isn't tax advice.

Estimated MAGI

Your projected Marketplace MAGI: AGI plus untaxed Social Security, tax-exempt interest and excluded foreign income, with its percent of the poverty level.

FPL headroom

How far your MAGI sits below the guardrail ceiling, shown with the ceiling in dollars. If you're over, it reads $0 and says by how much.

Bracket and gains room

Gross ordinary income you could add before the 24% bracket, and how much of the 0% long-term gains band your income leaves.

Recommended guidance

Plain-language next steps. When there's room, they say how much more you could convert or harvest before the smaller of the MAGI and tax limits.

Coverage notes

Below 138% of FPL in a Medicaid-expansion state, or below 100% in a non-expansion state, you also get a coverage warning.

Sensitivity table

MAGI, FPL percentage, headroom and verdict for $1,000 and $5,000 more conversion, $10,000 more gains, and $5,000 of each. Safe, Near limit (under $10,000 of headroom) or Above guardrail.