PersonalCFO

Backdoor Roth IRA Calculator

High earners above the Roth IRA income limit can still contribute via the “backdoor”: contribute to a traditional IRA (non-deductible) and convert to Roth. But if you have existing pre-tax IRA balances, the pro-rata rule triggers unexpected taxes.

IRA Balances

$
New after-tax contribution to convert
$
Traditional, SEP, SIMPLE IRAs (pre-tax)
$
Prior non-deductible contributions (Form 8606)

Your Income

$
$
Interest, dividends, etc.

Conversion Analysis

Pro-Rata Calculation

Conversion Amount$7,000
Total Traditional IRA Balance (Dec 31)$7,000
After-Tax Basis (including new contribution)$7,000
Tax-Free Fraction100.0%
Taxable Fraction0.0%
Tax-Free Amount$7,000
Taxable Amount$0

Tax Cost of Conversion

Federal Tax Cost
$0
On $0 taxable
Total Tax Cost
$0
0.0% of conversion
Marginal Tax Rate
26.4%
On next dollar of income
Clean backdoor Roth. With no pre-tax IRA balance, your entire $7,000 conversion is tax-free (assuming you convert before earning any gains). This is the ideal backdoor Roth scenario.

Backdoor Roth IRA Strategy

The 3-step backdoor: (1) Contribute to a traditional IRA (non-deductible). (2) Convert the traditional IRA to a Roth IRA. (3) Pay tax only on any gains between contribution and conversion. If you convert immediately, there is typically little to no taxable gain.

The pro-rata rule (IRC §408(d)(2)). The IRS treats ALL of your traditional IRA balances as one pot when determining the tax-free portion of a conversion. If you have $95,000 in pre-tax IRA funds and make a $5,000 after-tax contribution, only 5% ($5K / $100K) of any conversion is tax-free — not 100%.

The workaround: roll pre-tax to employer plan. If your 401(k) accepts incoming rollovers, you can move all pre-tax traditional IRA money into it. This leaves only after-tax basis in your IRA, making the backdoor conversion nearly tax-free. SEP and SIMPLE IRA balances also count toward the pro-rata calculation.

Mega backdoor Roth. Some 401(k) plans allow after-tax (non-Roth) contributions above the $23,500 limit, up to the total annual addition limit of $70,000 (2025). These after-tax contributions can be converted to Roth — either in-plan or via rollover. This is the mega backdoor Roth, and it allows much larger Roth contributions than the standard $7,000 backdoor.

Timing matters. The pro-rata rule is applied based on your total IRA balance as of December 31 of the year of conversion. If you roll pre-tax money to a 401(k), make sure the rollover completes before year-end.