Backdoor Roth IRA
Calculator 2026

A two-step strategy used by high-income earners who exceed the Roth IRA direct-contribution MAGI phase-out ($153k-$168k single / $242k-$252k MFJ for 2026): (1) make a non-deductible contribution to a Traditional IRA — there is no income limit on Traditional IRA contributions, only on the deductibility, (2) convert the Traditional IRA balance to a Roth IRA. The conversion itself has no income limit (the income cap on Roth conversions was repealed by TIPRA 2005, effective 2010 onward).

Result: money sits in a Roth where future growth and qualified withdrawals are tax-free. The strategy is not explicitly authorized in the tax code but has been tacitly endorsed by Congress via the Tax Cuts and Jobs Act conference report (2017) noting it is permitted.

IRC §408(d)(2) — the 'pro-rata rule' or 'cream-in-coffee rule' — requires that any Roth conversion aggregate ALL traditional, SEP, and SIMPLE IRA balances (across every institution) when computing the taxable portion. If you have $50,000 pre-tax in an old Traditional IRA and you contribute $7,500 non-deductible then convert that $7,500, the IRS treats the conversion as 87.0% taxable ($50,000 / $57,500) rather than 0% taxable as you'd hope.

To execute a clean Backdoor Roth, you typically need to first roll any existing pre-tax Traditional IRA money INTO your workplace 401(k) — 401(k) balances are NOT counted in the pro-rata aggregation. Form 8606 tracks your non-deductible basis.

Yes. The pro-rata rule under §408(d)(2) aggregates: Traditional IRA + SEP IRA + SIMPLE IRA balances as of December 31 of the conversion year.

Roth IRA balances are NOT counted. 401(k), 403(b), 457(b), Solo 401(k), and other employer-sponsored plans are NOT counted — money in those plans is invisible to the pro-rata calculation. This is why high-income earners often roll their pre-tax IRA balances into a 401(k) before doing a Backdoor Roth.

Inherited IRAs are treated separately and are also not aggregated with own-IRA balances for this rule.

2026 Modified Adjusted Gross Income (MAGI) phase-outs for direct Roth IRA contributions: Single / Head of Household: full contribution if MAGI ≤ $153,000; phased out $153k-$168k; no contribution if MAGI ≥ $168,000. Married Filing Jointly: full at MAGI ≤ $242,000; phased $242k-$252k; none above $252,000.

Married Filing Separately: phased $0-$10,000 (effectively blocked unless lived apart from spouse the entire year). These are IRS Revenue Procedure inflation adjustments — final 2026 numbers confirmed in late 2025.

MAGI for Roth purposes adds back certain deductions including student loan interest and foreign earned income exclusion.

Yes. The Build Back Better Act (2021) proposed eliminating the backdoor strategy starting January 1, 2022, but that legislation failed to pass the Senate.

As of 2026, no successor bill has been enacted. The strategy remains permitted: (a) the income cap on Roth conversions was repealed by TIPRA 2005 effective 2010, (b) there is no income cap on Traditional IRA contributions (only on deductibility), (c) the Tax Cuts and Jobs Act conference report 2017 noted Congress's intent that this combination is allowable.

Always file Form 8606 annually to document non-deductible basis — failure to file can cause double taxation on future withdrawals.

Different vehicles. Standard Backdoor Roth uses the Traditional IRA → Roth IRA path, capped at the $7,500 / $8,600 (50+) IRA contribution limit.

Mega Backdoor Roth uses an employer 401(k) plan that allows (a) after-tax (not Roth) contributions beyond the $24,500 elective deferral limit, and (b) either in-plan Roth conversions or in-service rollovers to a Roth IRA. 2026 total annual additions cap (§415(c)): $72,000 across employee elective deferrals ($24,500), employer contributions and after-tax contributions; the $8,000 age-50+ catch-up sits on top of that cap, not inside it. The after-tax bucket can hold tens of thousands more.

Mega Backdoor requires your 401(k) plan documents to explicitly permit after-tax contributions AND either in-plan Roth conversion or in-service rollover — many plans offer neither, so check your summary plan description first.

Traditional IRA contributions for a given tax year are allowed until the federal income tax filing deadline (April 15, 2027 for tax year 2026 — or October 15 with extension does NOT extend IRA contributions). The conversion to Roth, however, is reported in the calendar year the conversion happens — not the contribution year.

Many people contribute non-deductible to Traditional IRA on January 1 then convert to Roth a few days later to minimize any pre-conversion earnings (which would be taxable on conversion). The 'step transaction doctrine' is no longer a meaningful risk — the IRS has informally accepted contribute-then-immediately-convert sequences.

IRS Form 8606 reports non-deductible Traditional IRA contributions and Roth conversions. File annually for every year you (a) make a non-deductible Traditional IRA contribution, or (b) take a distribution from an IRA that includes basis, or (c) convert any Traditional/SEP/SIMPLE IRA to Roth.

Filing creates a paper trail of your non-deductible basis — without this, the IRS may treat future Roth conversions or IRA withdrawals as fully taxable. Late filing penalty: $50 per missed year.

Form 8606 can be filed standalone if you didn't file a 1040. Each spouse files their own Form 8606 — never combined.

Two separate 5-year rules. (1) Conversion rule: each Roth conversion has its own 5-year clock, starting 1 January of the year you convert (a 2026 conversion clears on 1 January 2031). If you are under 59½ and withdraw converted money inside that window, the 10% additional tax applies only to the part of the conversion you had to include in income — IRS Publication 590-B calls it the 'recapture amount'.

For a clean backdoor with no pre-tax IRA balance, almost nothing was taxable, so there is almost nothing to recapture; with a pro-rata conversion, the taxable share (Form 8606 line 18) is what is exposed. (2) Earnings rule: a separate 5-year clock from your FIRST Roth IRA contribution must pass before earnings become tax-free at distribution (combined with reaching 59½, death, disability, or first-home purchase up to $10k). For Backdoor Roths, this means even though you may convert principal yearly, if you're under 59½ and want to access earnings tax-free, you still must wait the original 5-year clock.

After 59½ and 5 years from first contribution, all qualified withdrawals are tax-free.

Not by itself — this is the most common misunderstanding of the strategy (mechanics, not advice). The money going in is a NON-deductible contribution: you already paid income tax on it, so converting it creates no new tax.

Your bracket only matters for the part of the conversion the pro-rata rule makes taxable. With no pre-tax Traditional, SEP or SIMPLE IRA balance on 31 December, the conversion is essentially tax-free at 12% or at 37% (only earnings between contribution and conversion are taxed).

With a pre-tax balance, the taxable share is taxed at your marginal rate — which is where a high bracket hurts, and why rolling the pre-tax IRA into a 401(k) first matters most for high earners. Compare that with a large pre-tax-to-Roth conversion (a Roth ladder), where the whole amount is taxed and the bracket decides everything.