Backdoor Roth IRA Calculator
Calculate the exact tax impact of a 2026 backdoor Roth IRA conversion, including the IRS pro-rata rule when you hold pre-tax IRA balances. Built for high earners whose income exceeds the direct Roth IRA contribution limits.
What Is a Backdoor Roth IRA?
A backdoor Roth IRA is a two-step maneuver that lets high-income earners contribute to a Roth IRA even when their income exceeds the direct contribution limits. You make a non-deductible contribution to a traditional IRA, then convert it to a Roth IRA. Because the contribution was already taxed and the conversion happens quickly, the taxable conversion amount is near zero — unless you have other pre-tax IRA money, which triggers the pro-rata rule.
2026 Income Limits That Trigger the Backdoor
For 2026, direct Roth IRA contributions phase out between $150,000-$165,000 (single) and $236,000-$246,000 (married filing jointly). Above those caps, direct Roth is blocked — but there is no income limit on traditional IRA contributions or conversions, which is why the backdoor works. The annual IRA contribution limit in 2026 is $7,000 ($8,000 if age 50+).
The Pro-Rata Rule Explained
If you have any pre-tax money across all traditional, SEP, or SIMPLE IRAs, the IRS treats your conversion as a proportional mix of pre-tax and after-tax dollars. Example: you have $93,000 pre-tax and contribute $7,000 after-tax. The 7% after-tax / 93% pre-tax ratio means your $7,000 conversion is only 7% tax-free — you owe ordinary income tax on $6,510 of it. To avoid this, roll pre-tax IRA money into a 401(k) first, leaving only after-tax dollars in IRAs before converting.
Backdoor Roth Step-by-Step
Step 1: Contribute up to $7,000 (or $8,000 if 50+) to a traditional IRA as a non-deductible contribution. Step 2: File Form 8606 to establish basis. Step 3: Convert the traditional IRA balance to Roth — ideally within days, before any gains accrue. Step 4: Report the conversion on your tax return. If done with no other pre-tax IRA balances, the taxable event is near $0 and the money grows tax-free in the Roth forever.
Frequently Asked Questions
Who should use a backdoor Roth IRA?
High earners whose income exceeds the Roth IRA direct contribution phase-out ($165,000 single / $246,000 MFJ in 2026). Below those thresholds, just contribute directly — no backdoor needed.
What is the pro-rata rule?
The IRS treats all your traditional, SEP, and SIMPLE IRAs as one pool. When you convert, the taxable fraction equals the pre-tax portion of that pool. A $7,000 conversion with $93,000 pre-tax balance is 93% taxable.
How do I avoid the pro-rata rule?
Before converting, roll all pre-tax traditional IRA money into your current 401(k) if the plan accepts rollovers. This empties the IRA of pre-tax dollars, leaving only after-tax basis to convert tax-free.
Is the backdoor Roth legal?
Yes. The IRS has explicitly acknowledged the strategy, and Congress has considered but not closed the "loophole." Form 8606 is the official paperwork for reporting non-deductible contributions and conversions.
Can I do a backdoor Roth every year?
Yes. Each tax year you can contribute $7,000 ($8,000 if 50+) as non-deductible and convert. Doing this consistently builds a substantial tax-free retirement account even at high incomes.
Does a backdoor Roth have a 5-year rule?
Converted amounts have their own 5-year clock for penalty-free withdrawal before age 59½. The earnings can be withdrawn tax-free only after you are 59½ AND the Roth has been open 5+ years.