Backdoor Roth IRA Calculator

A two-step strategy that lets high earners contribute to a Roth IRA despite exceeding the direct-contribution income limits. Step 1: Make a non-deductible contribution to a traditional IRA (no income limit on this). Step 2: Convert it to Roth (no income limit either). Net effect: you funded a Roth indirectly. Limit: $7,500 (+ $1,000 catch-up) per year. The IRS officially acknowledged the strategy in 2018.

When you convert any traditional IRA money to Roth, the IRS treats it as a proportional mix of pre-tax and after-tax money across ALL your traditional IRAs (aggregated, even SEP and SIMPLE). If you have $93,000 pre-tax and $7,000 non-deductible in your IRAs, only 7% of any conversion is tax-free. The other 93% is taxable. This often makes backdoor Roth pointless unless you have no other traditional IRA balance.

Two main strategies: (1) Roll your pre-tax IRA balance INTO your employer 401(k) plan (if it accepts rollovers) - 401(k) balances are excluded from the pro-rata calculation; (2) Convert ALL traditional IRA money to Roth in the same year and pay the tax. Some self-employed people open a Solo 401(k) specifically to "hide" their pre-tax IRA balance via rollover.

A separate strategy using AFTER-TAX (non-deductible, non-Roth) contributions to a 401(k) plan. In 2026, the total annual additions limit is approximately $70,000 (+ $7,500 catch-up at 50+, + super-catch). Subtracting your $24,500 employee deferral and employer match leaves room for after-tax contributions - potentially $30,000-$45,000+. These after-tax dollars can then be converted to Roth via in-service rollover or in-plan Roth conversion. Requires plan to support both after-tax contributions AND the conversion mechanism.