Retirement

Backdoor Roth Calculator

The backdoor Roth lets high earners fund a Roth despite the income limit: contribute to a traditional IRA with after-tax dollars, then convert it. With no other pre-tax IRA money, the conversion is tax-free. The catch is the pro-rata rule, which taxes part of it if you hold pre-tax IRA balances.

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Non-deductible contribution

After-tax money into a traditional IRA — up to the annual IRA limit.

Existing pre-tax IRA balance

Traditional, SEP, and SIMPLE IRA balances. This is what triggers pro-rata tax.

Your marginal tax rate

Tax on the conversion

No pre-tax IRA money, so the whole conversion is tax-free.

With no pre-tax IRA balance, this is the clean case: contribute, convert, done, no tax. Do the conversion soon after the contribution to avoid gains that would be taxable, and file Form 8606 to document the non-deductible basis.

Total IRA value: $7,000
Taxable fraction: 0%
Taxable amount: $0
Lands in Roth tax-free: $7,000

Tax-free$7,000100%

Compare scenariosTry three values of one input

Vary

Backdoor Roth Calculator results for three values of Non-deductible contribution
Non-deductible contribution
Tax on the conversion	$0	$0	$0
Total IRA value	$6,500	$7,000+$500	$7,500+$1,000
Lands in Roth tax-free	$6,500	$7,000+$500	$7,500+$1,000

Every other input stays at the value you set above — currently $7,000 for non-deductible contribution. Differences are measured against the first column.

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How this calculator works

All traditional IRA balances are pooled. The taxable fraction of a conversion is the pre-tax balance divided by the total IRA value including the new contribution. The taxable amount is that fraction of the converted amount, taxed at your marginal rate; the remainder lands in the Roth tax-free. With no pre-tax balance, the fraction is zero.

This assumes you convert the full non-deductible contribution and that the contribution has not grown before conversion — any gains would be taxable. A flat marginal rate is used. The 401(k) rollover workaround is described but not modelled. Report the transaction on Form 8606, and confirm current IRA limits and rules.

What this assumes

The pro-rata rule applies across ALL your traditional, SEP and SIMPLE IRAs combined — not just the account you convert from.
A 401(k) is excluded from the pro-rata pot, which is why rolling pre-tax IRA balances into a workplace plan first is the usual fix.
Tax is paid at the marginal rate you enter, and ideally from outside the account — using the balance itself defeats much of the point.

What changes this number

Existing pre-tax IRA balances: The whole calculation. $7,500 added to an existing $67,500 makes 90% of any conversion taxable.
Your marginal rate this year: A low-income year makes the same conversion far cheaper, which is why timing matters more than amount.
Form 8606: Non-deductible contributions must be tracked on it, or the basis is lost and the money is taxed twice.

A worked example

Take the clean: no pre-tax ira scenario. These figures are produced by the calculator above, not written alongside it, so they always match what the tool returns.

What you enter

Non-deductible contribution: $7,000
Existing pre-tax IRA balance: $0
Your marginal tax rate: 24%

What it returns

Tax on the conversion: $0
Total IRA value: $7,000
Taxable fraction: 0%
Taxable amount: $0
Lands in Roth tax-free: $7,000

Try an example

Clean: no pre-tax IRA Pro-rata bites hard Half pre-tax

Frequently asked questions

What is a backdoor Roth IRA?

A two-step move for people above the Roth income limit: contribute to a traditional IRA with after-tax dollars (no deduction), then convert it to a Roth. There is no income limit on conversions, so it is a legal, IRS-acknowledged way to get money into a Roth when you cannot contribute directly.

What is the pro-rata rule?

The IRS treats all your traditional, SEP, and SIMPLE IRAs as a single pool when you convert. If part of that pool is pre-tax money, the same proportion of your conversion is taxable — you cannot cherry-pick only the after-tax dollars. It is what turns a clean backdoor Roth into a partly taxable one.

How do I avoid the pro-rata tax?

Get pre-tax IRA money out of the picture before converting. The usual route is rolling it into your current employer's 401(k), which is not counted in the pro-rata calculation. That leaves only the after-tax contribution in your IRAs, so the conversion is fully tax-free.

Is the backdoor Roth legal?

Yes. It is a well-established strategy that the IRS has explicitly acknowledged, and Congress has considered but not closed it. You must report it correctly on Form 8606 to establish the after-tax basis. Proposals to eliminate it surface periodically, so its future is not guaranteed.

Should I worry about the step transaction doctrine?

It was a theoretical concern that contributing and converting immediately might be recharacterized, but the consensus and IRS guidance have effectively put it to rest — there is no required waiting period. Most people convert within days. Keeping the contribution in cash until converting avoids taxable gains.

This calculator helps answer

Roth or traditional — which should I use?

The usual framing asks whether your tax rate is higher now or later. That is correct but incomplete, and it hides the reason a Roth is often the better account even at identical rates.