The amount you choose to convert will be taxed as ordinary income, with no capital gain treatment on earnings. This additional income might push you to an even higher tax rate. The total taxable amount is affected by whether the underlying contributions to the IRA were deductible when you made the contribution. Deductible contributions are any gains on them are taxed at their full current value. So if your Traditional IRA has only deductible contributions, you will pay tax on the full amount. Nondeductible contributions have a nontaxable portion, which you'll calculate using cost basis on IRS Form 8606.
The IRS will collect the federal tax on a Roth IRA conversion when you file your tax return in 2023. You don't need to pay the estimated tax.
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