Can you still get money into a Roth IRA this year?
Above a certain income the IRS stops you from contributing to a Roth IRA directly. The backdoor Roth is the workaround: contribute to a traditional IRA, then convert it. It works cleanly only if you do not already hold pre-tax IRA money. Answer four questions to see where you stand.
About you
Direct Roth IRA eligibility
The pro-rata rule
When you convert, the IRS treats all your IRAs as one pot. If part of that pot is pre-tax, the same share of any conversion is taxable, even if you convert only the new after-tax dollars.
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The backdoor Roth in four steps
Clear out pre-tax IRAs
Roll any traditional, rollover, SEP or SIMPLE IRA balances into your 401(k) before December 31, so the IRA pot is empty on that date.
Contribute to a traditional IRA
Make a non-deductible contribution up to the annual limit. Leave it in cash so there are no earnings to tax.
Convert to Roth
A few days later, convert the whole balance to your Roth IRA. With no pre-tax money in any IRA, the conversion is tax-free.
File Form 8606
Report the non-deductible contribution and the conversion. Missing this form is the most common backdoor Roth mistake.
Have IRA balances in the way?
Untangling rollover IRAs, timing the roll-in, and coordinating with a spouse’s accounts is where this gets fiddly. We handle the sequence and the paperwork.