How a backdoor Roth IRA works
Congress limits who can contribute directly to a Roth IRA. For 2026 the amount you may put in phases out between $153,000 and $168,000 of modified AGI for single and head-of-household filers, and between $242,000 and $252,000 for married couples filing jointly. Above the top of your range, the front door is shut.
Two other rules leave a second door open. Anyone with taxable compensation can contribute to a traditional IRA, whatever their income, even when the contribution isn’t deductible. And a Roth conversion has no income limit at all. Put the two together and you have the backdoor: contribute to a traditional IRA, report the contribution as nondeductible, then convert it.
A nondeductible contribution is made with money you have already paid tax on, so it becomes basis. When your traditional IRAs hold nothing but that basis, converting it adds almost nothing to your income; only growth before the conversion is taxable, which is why many people convert within days or weeks. Inside the phase-out range you can split the year’s limit: the reduced amount goes in directly and the rest through the backdoor.
How to do a backdoor Roth IRA, step by step
The 2026 IRA limit is $7,500, or $8,600 if you are 50 or older by the end of the year, and it is one limit shared across all your traditional and Roth IRAs. You can contribute for 2026 until the April 2027 filing deadline; extensions don’t add time. You can repeat the process every year you have taxable compensation.
Neither the tax code nor IRS guidance sets a waiting period between the two steps, and the one-rollover-per-year limit doesn’t apply to conversions. Some people run the backdoor early in the year to get the money invested sooner; others wait until they know their income. A typical sequence:
- Check what every traditional, SEP and SIMPLE IRA you own will hold on December 31. Pre-tax money there makes the conversion partly taxable.
- Contribute up to the limit to a traditional IRA and don’t deduct it.
- Convert the balance to a Roth IRA, usually by an internal transfer at the same custodian.
- File Form 8606 with your return. Part I records the nondeductible contribution and Part II the conversion.
- Keep every Form 8606. Your basis follows you until your last traditional IRA dollar is gone.
How the pro-rata rule can make a backdoor Roth taxable
The backdoor is cheap only when the nondeductible contribution is the only money in your traditional IRAs. Under the pro-rata rule, the tax-free share of a conversion is your total basis divided by the December 31 value of all your traditional IRAs, including SEP and SIMPLE IRAs, plus anything converted or withdrawn during the year.
So an old rollover IRA worth $92,500 turns a $7,500 backdoor into a mostly taxable conversion, even if it sits at a different firm. Converting early in the year doesn’t help, because the year-end balance is what counts.
The usual remedy is to roll pre-tax IRA money into a workplace plan before December 31, if the plan accepts it. Publication 590-A lets only the otherwise-taxable part of an IRA go into a plan, so your basis stays behind. Your 401(k) or 403(b), your spouse’s IRAs, and inherited IRAs, unless a spouse treats one as their own, stay out of the calculation.
Other ways into a Roth when your income is too high
The backdoor Roth IRA is the smallest of several routes into Roth accounts, and none of the others has an income limit. A Roth 401(k) takes up to $24,500 of deferrals in 2026, plus catch-ups, where offered. A mega backdoor Roth converts after-tax 401(k) contributions and can move far more, but only if the plan allows it. Converting pre-tax savings is open to anyone, but it is taxed as ordinary income.
The routes stack, because IRA and workplace-plan limits are separate; IRS Publication 590-B notes that contributing to a designated Roth account doesn’t affect your Roth IRA eligibility. A high earner can fill Roth deferrals at work, run a mega backdoor if the plan allows it, and still do a backdoor Roth IRA for each spouse.
Common backdoor Roth mistakes
Most of what goes wrong happens on the tax return, not at the brokerage. Your custodian reports the contribution and the conversion on its own forms, but only your Form 8606 tells the IRS that the converted dollars were already taxed. Keep the year-end statements from every IRA, since they supply the December 31 values the form asks for. The errors that most often turn a nearly free conversion into a taxable one:
- Forgetting Form 8606. The conversion then looks fully taxable, and an unreported nondeductible contribution carries a $50 penalty unless you show reasonable cause.
- Deducting the contribution. If no workplace plan covers you or your spouse, it may be deductible, and a deducted contribution converts as taxable; you can designate it nondeductible when you file.
- Overlooking a SEP, SIMPLE or rollover IRA balance on December 31.
- Going over the limit. Direct and backdoor contributions share one $7,500 limit and together can’t exceed your taxable compensation.
- Mixing up the Roth five-year rules. Earnings still wait for their clock, though a conversion of pure basis carries almost no penalty risk.
Illustrative numbers
A single filer earning $210,000 does a backdoor Roth for 2026
- IRA basis
- Nondeductible contributions not yet recovered, carried on Form 8606
- Dec. 31 value
- All your traditional, SEP and SIMPLE IRAs at year-end; Roth, workplace and inherited accounts don’t count
- Amounts converted or withdrawn
- Conversions and distributions made during the same year
Basis you don’t use this year carries forward on Form 8606 to later withdrawals or conversions.
Nondeductible traditional IRA contribution$7,500
Converted to a Roth IRA a few days later$7,500
Other traditional IRA balances on Dec. 31, 2026$0
Taxable part of the conversion$0
Same, if a $92,500 rollover IRA were also held$7,500 × (1 − $7,500 ÷ $100,000) = $6,937.50
Extra federal tax at her 24% bracket in that caseAbout $1,665
Her modified AGI is above the $168,000 top of the single range, so she can’t contribute directly; with no other IRA money, the backdoor moves her $7,500 into the Roth IRA tax-free. With the rollover IRA still open on December 31, only 7.5% of the conversion is tax-free and $6,937.50 of basis carries forward. Rolling that IRA into her 401(k) first, if the plan accepts it, would avoid the tax.
At a glance
Routes into Roth accounts compared for 2026
| Route | Income limit | 2026 amount | Tax cost |
|---|---|---|---|
| Direct Roth IRA contribution | Phases out at $153,000–$168,000 single, $242,000–$252,000 joint | $7,500 ($8,600 at 50+) | None beyond tax on pay |
| Backdoor Roth IRA | None | $7,500 ($8,600 at 50+) | Little, if no other pre-tax IRA money |
| Roth 401(k) deferral | None | $24,500, plus catch-ups | None beyond tax on pay |
| Mega backdoor Roth | None, but plan testing can cap high earners | $72,000 of total additions, less deferrals and employer money | Tax on earnings before conversion |
| Conversion of pre-tax savings | None | Any amount | Ordinary income tax on the amount converted |
Put it in your plan
Backdoor Roth in MoneyWhatIf
MoneyWhatIf applies the 2026 Roth IRA income phase-out ranges, carried into later years, when it fits contributions, so a direct Roth IRA contribution shrinks as modeled income rises through the range, and traditional IRA deductibility phases out the same way. Once money is in a Roth, the engine tracks each conversion’s own five-year clock and, when you give the account’s opening year, the separate five-year wait on its growth. Early Roth IRA withdrawals draw on recorded contribution basis first.
Common questions
Backdoor Roth FAQs
Is the backdoor Roth IRA legal?
Yes. Nothing in the tax code bars a nondeductible traditional IRA contribution followed by a conversion, and the conference report on the 2017 Tax Cuts and Jobs Act describes that exact sequence as available to people over the income limits. The IRS hasn’t issued a separate ruling on it, so the protection is in doing it openly: report both steps on Form 8606 and apply the pro-rata rule.
Can my spouse do a backdoor Roth if they don’t work?
Yes, if you file jointly. Spousal IRA rules let a spouse without earnings contribute up to $7,500 for 2026, or $8,600 at 50 or older, as long as the couple’s combined taxable compensation covers both contributions. The pro-rata math is separate for each of you: each spouse files their own Form 8606, so one spouse’s rollover IRA doesn’t affect the other’s backdoor.
Can I recharacterize a Roth IRA contribution and then do a backdoor Roth?
Yes. If your income turns out too high for a direct contribution, have the custodian move the contribution and its earnings to a traditional IRA by your return’s due date, including extensions. It is then treated as a traditional IRA contribution from the start, so you can report it as nondeductible on Form 8606 and convert it; with no other pre-tax IRA money, only the earnings that moved with it are taxable. The conversion itself is final: conversions made since 2018 can’t be recharacterized.
Does a backdoor Roth start the Roth IRA five-year clock?
Yes. The clock for tax-free earnings starts on January 1 of the first year you make any Roth IRA contribution or conversion, so a first backdoor conversion in 2026 starts it on January 1, 2026. Each conversion also has its own five-year period for the 10% additional tax, but that tax reaches only the part that was taxable when converted, which is little or nothing in a clean backdoor.
Is a backdoor Roth IRA worth it?
The payoff is tax-free growth: dividends and gains in a Roth IRA aren’t taxed each year, qualified withdrawals are tax-free, and the original owner never has to take required minimum distributions. Against a taxable brokerage account, that edge compounds over decades. The cost is small when your traditional IRAs are empty. With pre-tax IRA money you can’t move out by December 31, the pro-rata rule taxes most of each conversion, which changes the math.