Pro-Rata Rule Backdoor Roth Calculator 2026

Estimate the federal tax bill triggered by the IRS pro-rata rule when you do a backdoor Roth conversion while holding pre-tax balances in any Traditional, SEP, or SIMPLE IRA. Updated for 2026 limits.

2026 IRA contribution limit is $7,500 ($8,500 if 50+)
Sum of nondeductible contributions reported on Form 8606
Traditional IRA + SEP-IRA + SIMPLE IRA combined
22%, 24%, 32%, or 35% bracket typical
0% if you live in TX, FL, NV, WA, etc.
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How the IRS Pro-Rata Rule Works

The pro-rata rule (IRC Section 408(d)(2)) treats every dollar across all of your Traditional, SEP, and SIMPLE IRAs as one big pot when you convert any portion to Roth. You cannot cherry-pick the after-tax dollars from your nondeductible contributions; the IRS forces a proportional split. The taxable percentage equals pre-tax balance divided by total IRA balance (pre-tax plus after-tax basis) on December 31 of the conversion year. If you have $50,000 of pre-tax IRA money and contribute $7,000 nondeductible, then convert that $7,000, only about $860 of the conversion is tax-free (12.3%) — the remaining $6,140 (87.7%) is taxed at your marginal rate. At a 24% federal bracket plus 5% state, you owe roughly $1,780 on what you thought was a tax-free Roth move.

The Form 8606 Tracking Trap

The pro-rata rule applies whether or not you have ever filed Form 8606 to track your basis. If you forgot to file 8606 in past years, your nondeductible contributions effectively disappeared into the pre-tax pool and the IRS will treat 100% of your conversion as taxable. You can file amended 8606 forms going back several years to recapture basis, but the conversion still aggregates everything on the December 31 snapshot. Workplace 401(k) accounts are not part of the pro-rata calculation — only Traditional IRAs, SEP-IRAs, and SIMPLE IRAs. Roth IRAs are also excluded. Inherited IRAs and 401(k)s are excluded as long as you have not commingled them with your own IRAs.

How to Avoid the Pro-Rata Trap

The cleanest fix is the reverse rollover: move your entire pre-tax Traditional IRA balance into your employer's 401(k) plan before December 31 of the conversion year. After the rollover, only the after-tax basis remains in the IRA, so a Roth conversion becomes 100% tax-free. Most large 401(k) plans (Fidelity, Vanguard, Schwab corporate plans) accept incoming IRA rollovers, but check that your plan allows them. Self-employed savers can use a Solo 401(k) — opening one before December 31 and rolling pre-tax IRA money into it preserves the backdoor Roth strategy. Other strategies include skipping the backdoor entirely and contributing to taxable accounts, or doing a smaller Roth conversion that consumes part of the pre-tax balance over several years. Last updated: 2026, based on IRS Publication 590-A and 590-B and IRC Section 408. Source: irs.gov/retirement-plans.

Reading Your Result

The summary shows the taxable percentage of your conversion, the dollar amount that flows to ordinary income, and the federal-plus-state tax bill. If the result is close to zero, you either have minimal pre-tax IRA balance or your basis dominates the IRA pool — the backdoor Roth works as intended. If the tax is large, the recommendation will suggest the reverse rollover into a 401(k) before year-end. Always coordinate with your CPA before doing a Roth conversion in December — the December 31 balance is what counts, not the date you contributed or converted.