Backdoor Roth IRA Guide & Pro-Rata Calculator 2026

Non-Deductible Contribution

Contribute to traditional IRA (no income limit for contributions - only for deductibility). Mark as non-deductible. File Form 8606, Part I. Establishes basis.

Convert to Roth

Convert the traditional IRA to Roth. Wait for the contribution to clear (typically a few days to avoid "step transaction" risk). Report on Form 8606, Part II.

Pro-Rata Calculation

If you have OTHER pre-tax IRA balances, the pro-rata rule taxes a portion of the conversion. This is the critical step most people overlook. IRC 408(d)(2).

Pro-Rata Rule Calculator • IRC 408(d)(2)

The pro-rata rule aggregates ALL traditional IRA balances. You cannot selectively convert only the non-deductible (after-tax) portion. The IRS looks at ALL your IRAs - traditional, SEP, SIMPLE - as one pool. Each conversion is treated as a proportional mix of pre-tax and after-tax money. This makes the backdoor Roth less effective (or fully taxable) if you have existing pre-tax IRA balances.

Non-Deductible Contribution This Year ($)

2026 limit: $7,000 ($8,000 if age 50+). IRC 219(b)(5)(A).

Total Pre-Tax IRA Balance (all IRAs) ($)

ALL pre-tax IRA balances as of December 31 of the year of conversion: traditional IRAs, SEP IRAs, SIMPLE IRAs. Rollover IRAs count. 401(k)s do NOT count. The critical number.

Prior Non-Deductible Basis (Form 8606) ($)

Total non-deductible IRA contributions from prior years (cumulative Form 8606 Line 14). Add to this year's contribution for total basis.

Conversion Amount This Year ($)

Amount being converted to Roth this year. Typically equals the contribution.

Marginal Tax Rate

Enter your information above.

Mega Backdoor Roth & Additional Strategies

Mega Backdoor Roth

If your 401(k) plan allows after-tax contributions AND in-service withdrawals or in-plan conversions: contribute up to the 2026 total 415(c) limit ($70,000) minus employer contributions minus elective deferrals, then convert to Roth. 2026 limits: 415(c) limit: $70,000. Elective deferral: $23,500 ($31,000 if 50+). After-tax space: up to $46,500. Plan must permit this - verify with plan administrator. IRC 402(g), IRC 415(c).

Eliminating the Pro-Rata Problem

If you have pre-tax IRA balances creating pro-rata exposure, consider: rolling your pre-tax IRA into your current employer 401(k) (if the plan accepts rollover contributions). This removes the pre-tax balance from the IRA pool and makes the backdoor Roth effectively tax-free. Must be done BEFORE December 31 of the conversion year. Verify your 401(k) plan accepts rollovers.

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