You worked for years toward a higher income. Then you learned that you now earn too much to put money into a Roth IRA. It can feel like a penalty for doing well: the account you expected to draw on tax-free in retirement is closed to new money in your best earning years.
A backdoor Roth IRA is how people in that position keep adding to a Roth IRA. It is two ordinary steps. You put money into a traditional IRA and do not deduct it. Then you convert that money to a Roth IRA. The law puts no income limit on either step.12
The tax depends on the other IRA money you already have. The form lines and the arithmetic are in the detailed version below.
What is a backdoor Roth IRA?
A backdoor Roth IRA is the name people give to those two steps. It is not a separate kind of account.
People do it for the same reasons they want a Roth IRA. If you meet the rules on age and on how long the account has been open, money you take out later is not taxed again. You are not required to take it out during your life.2 That makes it money you can leave alone through a long retirement, or leave to the people you care about.
How does a backdoor Roth work?
First you make the contribution. You take no deduction for it, so that money has already been taxed. The tax rules call it your basis.1
Then you convert. A conversion is taxed like a withdrawal: the part that was never taxed is added to your income, and your basis is not.2
You report both steps on Form 8606 with your tax return.3 The form is your record that the contribution was already taxed.
What is the backdoor Roth limit for 2026?
A backdoor Roth has no limit of its own. Your limit is the ordinary IRA contribution limit: $7,500 for 2026, or $8,600 if you are 50 or older by the end of the year.4 That limit covers all of your traditional and Roth IRAs together. It can look too small to bother with, but you can add it in each year you have earned income, and if you file jointly your husband or wife can too.1 At the 2026 limit, ten years of contributions is $75,000 for one person, before any growth.
The income limit applies only to direct contributions. For 2026, the amount you may contribute to a Roth IRA directly starts to shrink at $153,000 of modified adjusted gross income if you are single and $242,000 if you are married filing jointly. It reaches zero at $168,000 and $252,000.42
What is the pro-rata rule?
You cannot choose to convert only the dollars that were already taxed. The tax law treats all of your traditional IRAs, SEP and SIMPLE IRAs included, as one pool.53
If you rolled an old 401(k) into an IRA when you changed jobs, that IRA counts in the pool, even if you have not looked at it in years.
Suppose you contribute $7,500 and convert it. If that $7,500 is the only money in any of your traditional IRAs, and it has earned nothing before you convert, none of it is taxed again. Now suppose you also have $92,500 in an old rollover IRA. Your $7,500 is then 7.5% of a $100,000 pool, so only 7.5% of the conversion, $562.50, is tax-free. The other $6,937.50 is added to your income.6
The pool is measured on December 31. If you convert in March, the tax still depends on balances you will not know until the year ends.5 Form 8606 counts all of your traditional IRAs. It does not count a workplace plan such as a 401(k).3 To see the split on your own balances before you convert, use our backdoor Roth pro-rata calculator.
Add them all together, as of the end of the year you convert. A 401(k) does not count, and your spouse's IRAs are counted separately.
Contributions you never deducted, so they were already taxed once. Earlier years' total is on your last Form 8606, plus this year's contribution.
Used only for the tax figure. The share that is taxed does not depend on it.
- Part of the conversion not taxed
- $563
- Shown on Form 8606, line 17
- Tax on the conversion at 24%
- $1,665
- Your rate on the $6,938 that is taxed
- After-tax money left for future years
- $6,938
- Goes on next year's Form 8606, line 14
You cannot get around the rule by converting only the account that holds the after-tax money. The law counts every IRA you own as one pool. You can get around it by moving the pre-tax money out of the pool first. A rollover into a 401(k) that accepts one, finished before December 31 of the year you convert, leaves only after-tax money in the pool, and the next conversion is tax-free.
This follows the Form 8606 rule for splitting a conversion between after-tax and pre-tax money, using every IRA balance at year end plus the amount converted. It leaves out inherited IRAs, employer plans, and your spouse's accounts, which are not in the pool, and any other withdrawal in the same year, which would share the same split. The tax figure is simply your rate times the taxed part. Educational, not advice.
This is a simplified model, not your actual tax return or plan. It only knows what you type in, leaves out rules that may apply to you, and cannot weigh the other facts and trade-offs a real decision depends on. Before you act, talk with a professional who knows your whole situation.
Reviewed September 5, 2026. Full methodology and sources.
What goes wrong with a backdoor Roth?
The two problems we see most often are lost records and bad timing.
The two problems we see most often are lost records and bad timing.
People do not always keep track of the contributions they made without a deduction. Years later they cannot show which dollars were already taxed, and they can end up paying tax on the same money twice. Form 8606 is that record, so it matters that it is filed each year and kept.3
People also convert in a year when it costs more tax than it needed to. The tax depends on the other money in your IRAs at the end of that year and on the rest of your income that year.5 A backdoor Roth has to be planned ahead so that the steps are done at a time that keeps the tax low.
Is a backdoor Roth IRA legal?
The name makes it sound like a trick, so it is fair to ask. Each of the two steps is in the tax code. The statute allows nondeductible contributions to a traditional IRA.1 Since 2010, it has allowed conversions to a Roth IRA at any income.2 You report both steps to the IRS yourself, on Form 8606.3
Legal does not mean tax-free. The law can change, and this page describes the rules for 2026.4
Who does a backdoor Roth IRA fit?
It tends to fit you if you are still in your high-earning years, your income is over the Roth limit, and you have little or no pre-tax money in traditional, SEP or SIMPLE IRAs. It fits poorly if a large rollover IRA would make most of your conversion taxable. Your CPA can tell you whether that is true for you, and what to do about an old IRA before you convert.
Where we fit in. We integrate tax considerations into your investment strategy and collaborate with estate attorneys and CPAs to ensure your plan is coordinated. We are not a law firm or accounting firm, so we do not provide legal or tax advice. Everything in this material is for educational purposes, based on primary sources. Before taking any action, please consult the appropriate professionals to apply these ideas to your situation.
Earning too much for a Roth IRA does not have to end your Roth savings. If you would like to look at your accounts with someone before you convert, we are glad to have that conversation.
The detailed versionThe pro-rata arithmeticFor CPAs and anyone who wants the form: the statute, the Form 8606 lines, and three worked cases.Show
Statutory basis
Designated nondeductible contributions to an individual retirement plan are permitted by 26 U.S.C. § 408(o).1 Section 408A(c)(3) reduces the Roth IRA contribution limit by modified adjusted gross income; a qualified rollover contribution is not taken into account for that limit under § 408A(c)(5)(B).2 The former bar on conversions above $100,000 of adjusted gross income was struck by Pub. L. 109–222 for taxable years beginning after December 31, 2009.2
On a conversion, § 408A(d)(3)(A) includes in gross income any amount that would be includible were it not part of a qualified rollover contribution, and provides that § 72(t) does not apply.2 The includible amount is found under § 408(d)(1) and (2): all individual retirement plans are treated as one contract, all distributions during the taxable year as one distribution, and the value of the contract is computed as of the close of the calendar year, increased by distributions during the year.5
The computation on Form 8606
In the Form 8606 instructions, "traditional IRA" includes traditional SEP IRAs and traditional SIMPLE IRAs.3
- B is total basis: nondeductible contributions for the year (line 1) plus basis carried from earlier years (line 2).
- V is the value of all traditional IRAs on December 31 (line 6).
- C is the net amount converted during the year (line 8).
- D is other distributions from traditional IRAs during the year.
Nontaxable share = B ÷ (V + D + C), not more than 1.
Taxable part of the conversion = C × (1 − nontaxable share).
Basis not used in the year carries forward. In the 2025 form, Part II reports the conversion (line 16), the basis allocated to it (line 17) and the taxable amount (line 18).3
Three cases
- $0
- Nontaxable share
- 100%
- Nontaxable
- $7,500.00
- Taxable
- $0.00
- $92,500
- Nontaxable share
- 7.5%
- Nontaxable
- $562.50
- Taxable
- $6,937.50
- $292,500
- Nontaxable share
- 2.5%
- Nontaxable
- $187.50
- Taxable
- $7,312.50
2026 amounts
The deductible amount under § 219(b)(5)(A), which also caps IRA contributions, is $7,500 for 2026, and the catch-up amount for individuals who have attained age 50 is $1,100.4 The adjusted gross income limitation under § 408A(c)(3)(B)(ii) is $242,000 for a joint return or a qualifying widow(er) and $153,000 for other taxpayers, other than married taxpayers filing separately, for whom it is $0.4 The phase-out runs over $15,000, or $10,000 for a joint return or a married individual filing separately.2
Not covered here
Earnings between the contribution and the conversion, which are taxable when converted. The five-taxable-year rule of § 408A(d)(3)(F) for amounts converted, and the conditions for a qualified distribution.2 State income tax. After-tax contributions to a workplace plan.
