Backdoor Roth IRA Calculator

What Is a Backdoor Roth IRA? High earners above the Roth IRA income limits cannot contribute directly to a Roth IRA. In 2024 the phase-out ran from $146,000 to $161,000 for single filers and $230,000 to $240,000 for married filing jointly. Both the limits and the annual contribution cap are adjusted for inflation each year, so check the current figures before you act on this. The backdoor strategy is a legal workaround: contribute to a traditional IRA (non-deductible), then immediately convert it to a Roth.

Pay the tax from outside the IRA. If you owe tax on the conversion, do not have it withheld from the converted amount. The full contribution should land in the Roth and the tax bill should be settled from a normal taxable account. Withholding shrinks the Roth balance permanently, and if you are under 59½ the withheld portion counts as its own early distribution with a 10% penalty attached. It is the single most common way people turn a good move into an expensive one.

The Pro-Rata Rule — The Catch If you have ANY other pre-tax IRA money (rollover IRA, deductible IRA, SEP IRA, SIMPLE IRA), the IRS requires you to treat your entire IRA portfolio as one pot. You cannot pick and choose which dollars you convert.

Pro-Rata Formula Taxable % = Pre-tax balance ÷ (Pre-tax balance + All non-deductible basis) Tax owed = Conversion amount × Taxable % × Marginal tax rate

Clean Backdoor (Best Case) If you have zero pre-tax IRA balance, the conversion is 100% tax-free. This is the “clean” backdoor — the ideal scenario.

Example with Pro-Rata You contribute $7,000 non-deductible. But you also have $63,000 in a rollover IRA. Total IRA assets = $70,000. Pre-tax = $63,000. Taxable % = $63,000 / $70,000 = 90%. Tax on $7,000 conversion = $7,000 × 90% × 32% = $2,016.

Solution: Roll It Out If your employer plan accepts incoming rollovers, move the pre-tax IRA balance there first. Then do the backdoor conversion with zero pre-tax IRA balance.