What is the income limit for a Backdoor Roth IRA?

There is no income limit for performing a Backdoor Roth IRA. The strategy is specifically designed to allow individuals whose income exceeds the direct Roth IRA contribution limits (expected to be $161,000 for single filers and $240,000 for married filing jointly in 2026) to still fund a Roth IRA.

How much can I contribute to a Backdoor Roth IRA in 2026?

You can contribute the maximum allowable IRA contribution for 2026, which is expected to be $7,000, or $8,000 if you are age 50 or older. This amount is first contributed as a non-deductible traditional IRA contribution and then converted to a Roth IRA.

Is a Backdoor Roth IRA legal?

Yes, the Backdoor Roth IRA strategy is entirely legal and has been affirmed by the IRS. It leverages existing tax code provisions that allow non-deductible traditional IRA contributions and Roth conversions without income limits.

What is the pro-rata rule and how does it affect a Backdoor Roth?

The pro-rata rule dictates that if you have any pre-tax money in *any* traditional, SEP, or SIMPLE IRA accounts, a portion of your Roth conversion will be taxable. The IRS views all these accounts as aggregated. To avoid this, it's best to have zero pre-tax money in traditional IRAs before converting, often by rolling pre-tax funds into an employer 401(k).

Do I have to pay taxes on a Backdoor Roth conversion?

If you have no existing pre-tax money in any traditional, SEP, or SIMPLE IRA accounts, and you convert only the non-deductible contribution (plus any minimal earnings), the conversion itself will be largely tax-free. Any small earnings accrued between contribution and conversion would be taxable. If you have pre-tax IRA money, a portion of the conversion will be taxable due to the pro-rata rule.

How do I report a Backdoor Roth IRA on my taxes?

You must file IRS Form 8606, Nondeductible IRAs, with your tax return for the year you make the non-deductible contribution and conversion. This form tracks your after-tax basis in your traditional IRA and calculates the taxable portion of your Roth conversion, if any.

Can I do a Backdoor Roth IRA if I have a 401(k)?

Yes, having a 401(k) does not prevent you from performing a Backdoor Roth IRA. In fact, if you have pre-tax money in a traditional IRA, rolling those funds into your current employer's 401(k) (if the plan allows) is often the best way to avoid the pro-rata rule and ensure your Backdoor Roth conversion is tax-free.

Backdoor Roth IRA Guide: Tax-Free Retirement Savings | One…