Backdoor Roth IRA Calculator

Roth IRA direct contributions phase out at $150,000–$165,000 (single) and $236,000–$246,000 (married filing jointly) per IRS Rev. Proc. 2024-40 for tax year 2025. The 2026 inflation-adjusted thresholds will be released in late 2025 and should be reverified at year-end. But there is no income limit on traditional IRA contributions or on Roth conversions. The 2010 elimination of the $100K Roth conversion income limit unintentionally created an open door: contribute to a traditional IRA (non-deductible due to your income or workplace coverage), then immediately convert that contribution to a Roth IRA. Result: the same long-run tax-free growth as a direct Roth contribution. Congress has been aware of this strategy since 2010 and has periodically discussed restricting it (Build Back Better in 2021 proposed closing it), but no restrictions have passed as of 2026. Most tax planners treat the strategy as durable but recommend executing while it remains available.

The IRS treats ALL your traditional IRA balances as one pool for conversion taxation. If you have $93,000 of pre-tax traditional IRA money and contribute $7,000 of after-tax basis through the backdoor, the IRS treats your $100,000 total IRA as 7% after-tax and 93% pre-tax. When you convert $7,000, 93% of that ($6,510) is taxed as ordinary income. The basis is spread proportionally across the IRA. This catches countless first-time backdoor users off guard. Solutions: (1) Roll your existing pre-tax IRA balances into your employer 401(k) plan before doing the backdoor — 401(k) balances are not part of the IRA pro-rata pool. (2) Accept the partial taxation if the rollover is not feasible. (3) Skip the strategy entirely if neither option works. The IRS-defined IRA pool includes Traditional, SEP, SIMPLE, and rollover IRAs but excludes employer 401(k)s, 403(b)s, and 457s.

Step 1: Open a traditional IRA at your brokerage if you do not already have one with zero balance. Step 2: Make a non-deductible contribution (up to $7,000 in 2026, $8,000 if 50+). Step 3: Wait a few days for the contribution to settle (some practitioners convert same-day; the IRS has clarified this is acceptable). Step 4: Convert the traditional IRA balance to a Roth IRA via your brokerage's conversion form. Step 5: File IRS Form 8606 with your tax return documenting the non-deductible contribution and the conversion. Form 8606 is the critical paperwork — failure to file creates audit risk and can subject the same dollars to double taxation later. Step 6: Repeat annually. Many high earners set a calendar reminder for early January to execute the backdoor each year.

The Mega Backdoor Roth uses after-tax 401(k) contributions converted to Roth, allowing dramatically larger annual Roth additions. The 2026 total 401(k) contribution limit (employee + employer + after-tax) is $70,000, less the $23,500 employee elective limit minus your employer match. For a typical high earner with a $10K employer match, this leaves $36,500 of after-tax contribution space that can be converted to Roth via in-plan Roth conversion or in-service distribution. Combined with the $7K backdoor IRA, that's $43,500 in additional Roth dollars per year beyond standard limits. Requirements: your 401(k) plan must permit after-tax contributions AND either in-plan Roth conversions or in-service distributions. Many corporate plans do — verify with your plan administrator. The mega backdoor is the most powerful retirement strategy available to high earners with the right plan features.