The backdoor Roth IRA is a perfectly legal two-step process that lets high earners get money into a Roth even when their income exceeds the direct contribution limit. You contribute to a non-deductible Traditional IRA — which has no income limit on the contribution itself — and then convert that balance to a Roth IRA, which also has no income limit.
The calculator above estimates the tax cost based on your existing pre-tax IRA balance (the pro-rata rule input) and your marginal rate. If your only pre-tax IRA balance is zero, the tax cost of the backdoor is also zero — you've contributed after-tax dollars and converted them, with no taxable gain in between.
Why this strategy exists
Congress eliminated the income limit on Roth conversions in 2010, but never eliminated the income limit on Roth contributions. The asymmetry created an unintended loophole that has been consistently endorsed by the IRS and explicitly acknowledged in conference committee reports tied to the 2017 TCJA. As of 2026 it remains fully legal, though periodic legislative proposals have threatened to close it.
The strategy is most useful for single filers earning over $165,000 or joint filers over $246,000 — the points at which direct Roth contributions are entirely disallowed.
Step-by-step mechanics
Step one: contribute up to $7,000 ($8,000 if 50+) to a Traditional IRA. Because your income exceeds the deduction threshold, this contribution is non-deductible, and you'll establish basis by filing Form 8606 with your tax return.
Step two: convert that Traditional IRA balance to your Roth IRA. Most custodians let you do this online with a few clicks. If you convert immediately after contributing — before any meaningful interest accrues — the taxable amount is essentially zero.
Step three: at tax time, file Form 8606 twice — once to report the non-deductible contribution (Part I) and once to report the conversion (Part II). Skipping this form is the single most common mistake, and it can cause the IRS to double-tax the conversion years later.
The pro-rata trap
The IRS aggregates all your non-Roth IRA balances on December 31 of the conversion year and treats every conversion dollar as a blended mix of pre-tax and after-tax money. If you have $93,000 of pre-tax IRA money and contribute $7,000 of non-deductible money, then convert $7,000, the IRS treats 93% of your conversion as taxable.
The clean fix is to roll any existing pre-tax IRA balances into your current employer's 401(k) before December 31. 401(k) balances are not included in the pro-rata calculation. If your 401(k) doesn't accept rollovers, the math is genuinely painful and a backdoor may not make sense in your situation. See the pro-rata deep dive for workarounds.
Timing and the 'step transaction doctrine'
Some advisors used to recommend waiting weeks between contribution and conversion to avoid the step transaction doctrine. The IRS has effectively settled this question — same-day conversions are accepted. Most practitioners now contribute and convert on the same day or within a few business days.
If you accidentally let earnings accrue before conversion, those earnings are taxable as ordinary income at conversion. The amount is usually trivial (a few dollars) but still must be reported.
Mega backdoor: the larger sibling strategy
If your employer's 401(k) plan allows after-tax (not Roth) contributions plus in-service distributions or in-plan Roth conversions, you can use the mega backdoor Roth to move tens of thousands more per year into a Roth account. The 2026 combined 401(k) limit is $70,000 ($77,500 if 50+), so the headroom above your normal elective deferral can be substantial.
Frequently asked questions
Is the backdoor Roth legal?+
Yes. The IRS has consistently recognized it, and the 2017 TCJA conference report explicitly acknowledged the strategy. Future legislation could change this.
Do I have to wait before converting?+
No. Same-day or next-day conversions are accepted. Waiting only allows taxable earnings to accrue.
What if I have a large pre-tax IRA balance?+
The pro-rata rule will make most of your conversion taxable. Roll the pre-tax IRA into a current 401(k) before December 31 to neutralize this.
Do I need to file any special tax form?+
Yes — Form 8606. File it for both the non-deductible contribution and the conversion. Missing this form is the most common backdoor Roth mistake.
Can I do a backdoor Roth every year?+
Yes, every year you're over the income limit. Many high earners do $7,000 / $8,000 backdoor contributions annually for decades.
