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    The Backdoor Roth Process

    8 min read•Updated June 2026

    Educational content only. This article is for informational purposes and does not constitute personalized financial, tax, or investment advice. Consult a qualified professional for guidance specific to your situation.

    TL;DR

    • High earners can still do Roth: Income limits only apply to direct Roth contributions — the Backdoor process bypasses them
    • Two-step process: Contribute to a Traditional IRA (non-deductible), then immediately convert to Roth — then file Form 8606
    • Watch the pro-rata rule: If you have any pre-tax money in a Traditional IRA, the conversion will be partly taxable

    Not sure if you have pro-rata issues or how to set up the Backdoor Roth correctly? Book a free 15-min call and I can walk you through the process step by step.

    A Backdoor Roth IRA is a method that high-income earners can use to contribute to a Roth IRA if one surpasses the income limits for direct contributions to a Roth IRA. As of 2024, these limits are $146,000 if filing as 'single' and $230,000 if filing as 'married filing jointly'. The benefits are enormous: the post-tax dollars you contribute to a Roth IRA can grow tax-free for life, and if needed, the principal can be withdrawn at any time without penalty.

    The Tax Advantages of Roth Contributions

    YearTotal contributionsBalance with market growthAmount not subject to tax
    1$7,000$7,490$490
    10$70K$103K$33K
    20$140K$307K$167K
    30$210K$708K$498K

    Important Caveat

    The IRS hates when after-tax and pre-tax dollars mix, and you have to ensure you have no pre-tax funds sitting in a Traditional IRA. If you do, it will be subject to the IRS's pro-rata rule when you attempt to do a Backdoor Roth. One simple way to get around this is to rollover your Traditional IRA into a Traditional 401K.

    The Backdoor Roth Process

    Assuming you have no pre-tax funds in your Traditional IRA, the process is pretty straightforward:

    1. 1

      Make a Traditional IRA Contribution

      Since there are no income limits for contributing to a Traditional IRA, you first make a non-deductible contribution to a Traditional IRA account. Non-deductible means that you don't get a tax deduction for the contribution.

    2. 2

      Convert your Traditional IRA to Roth IRA

      After making the contribution to the Traditional IRA, convert that money into a Roth IRA. This conversion is allowed regardless of income level. Schwab, Fidelity, and Vanguard all make this seamless and as simple as transferring funds between accounts (assuming that your Traditional IRA and Roth IRA are with the same brokerage). I recommend to do this as you complete Step 1.

    3. 3

      Report your Backdoor Roth on your taxes

      To correctly report your Backdoor Roth IRA, use "Form 8606 - Nondeductible IRAs". In Part I of the form, you'll report that your traditional IRA contribution is classified as nondeductible. In Part II, you'll inform the IRS that you converted the entire nondeductible contribution to a Roth IRA. There are a number of guides online on how to do this in FreeTaxUSA, TurboTax, and H&R Block.

    Visual Representation of the Process

    Nondeductible contribution to Traditional IRA

    Up to $7,000 (2024 limit, age < 50)

    Convert immediately

    No waiting period required

    Funds now in Roth IRA

    Growth is now tax-free forever

    Report on taxes

    Form 8606

    Repeat annually

    Can be done every tax year

    Pro-Rata Rule Example

    What happens if you have existing pre-tax funds in your Traditional IRA?

    Example Scenario:

    • You have $45,000 in a Traditional IRA from a previous 401K rollover (pre-tax)
    • You make a $6,000 non-deductible contribution to your Traditional IRA
    • You convert $6,000 to a Roth IRA

    Result: The IRS will consider your conversion to be partly taxable, based on the proportion of pre-tax to after-tax money in all of your Traditional IRAs combined.

    Pro-Rata Calculation:

    Taxable portion = Conversion amount × (Pre-tax IRA balance ÷ Total IRA balance)

    Taxable portion = $6,000 × ($45,000 ÷ $51,000) = $6,000 × 0.882 = $5,292

    Instead of tax-free conversion of the full $6,000, $5,292 would be taxable income, and only $708 would be a tax-free conversion.

    Is it worth it?

    In most cases (and once you get over the initial headache of setting it up), yes. The ability to grow retirement savings tax-free for decades can provide substantial financial benefits over time, as shown in the tax advantages table above.

    Not sure if you have pro-rata issues or how to set up the Backdoor Roth correctly?

    I can walk you through the process step by step and check if you have any pre-tax IRA balances that need to be addressed first. One-time consultation, no ongoing fees.

    Book a Free 15-Min Call