Backdoor Roth IRA: Step-by-Step for High Earners
Last verified: 2026-08-17.
If your income is above the Roth IRA contribution limit ($168,000 single / $252,000 married filing jointly in 2026), you are not allowed to contribute directly. The backdoor Roth IRA gets you in legally, but only if you avoid one tax landmine called the pro-rata rule.
The four steps
- Open a Traditional IRA at a major brokerage (Fidelity, Schwab, Vanguard).
- Contribute $7,500 ($8,600 if 50+). The contribution is non-deductible because you are over the income limit anyway.
- Convert the entire balance to a Roth IRA immediately. Most brokerages let you do this in two clicks.
- File IRS Form 8606 with your tax return to report the non-deductible basis and the conversion.
Because the contribution is non-deductible and the conversion happens before any growth, the tax owed is approximately zero.
The pro-rata rule (the landmine)
The IRS treats all of your Traditional, SEP, and SIMPLE IRAs as one big pot when calculating the tax on a conversion. If you have any pre-tax dollars in any of those accounts, a portion of your conversion will be taxable based on the ratio of pre-tax to total IRA balance.
Example: You contribute $7,500 to a new Traditional IRA, but you also have $67,500 of pre-tax money in a Rollover IRA from a previous job. Your pre-tax ratio is $67,500 / $75,000 = 90%. $6,750 of your $7,500 conversion is taxable. That is not what most people expect.
Two ways around the pro-rata rule
- Roll your pre-tax IRAs into your 401(k) before doing the backdoor Roth. Workplace 401(k) balances do not count toward the pro-rata calculation. This is the cleanest fix if your plan accepts rollovers (most do).
- Convert everything to Roth in one shot and pay the tax. Worth it for some high earners, especially in a low-income year.
The spousal backdoor
If your spouse does not work, they can still do a backdoor Roth using your income. Just open a Traditional IRA in their name and follow the same steps. That doubles your household's annual Roth contribution to $15,000.
Watch the timing
The IRS considers a conversion a one-step event. Contribute today, convert tomorrow, file Form 8606 by April 15. Waiting weeks or months between contribution and conversion is fine, but earnings during that time become taxable on conversion.
Common mistakes
- Ignoring the pro-rata rule. The single biggest mistake, and the most expensive.
- Forgetting Form 8606. Without it, the IRS may tax both the original contribution and the conversion.
- Choosing "Roth contribution" instead of "non-deductible Traditional." If your income is over the limit, a direct Roth contribution triggers a 6% annual excess contribution penalty.
Sources
- IRS Notice 2025-67, 2026 inflation-adjusted limits (IRA contribution limit and Roth IRA income phase-outs): irs.gov/pub/irs-drop/n-25-67.pdf
- Internal Revenue Code §408A, Roth IRAs (Cornell LII): law.cornell.edu/uscode/text/26/408A
- IRS Form 8606, Nondeductible IRAs, and instructions: irs.gov/forms-pubs/about-form-8606
- Internal Revenue Code §408(d)(2), pro-rata aggregation of IRA distributions (Cornell LII): law.cornell.edu/uscode/text/26/408
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Frequently Asked Questions
What income disqualifies me from contributing to a Roth IRA in 2026?
Direct Roth IRA contributions are unavailable above $168,000 of modified adjusted gross income for a single filer, and above $252,000 for a married couple filing jointly, in 2026. The backdoor Roth exists because the income limit applies to contributions but not to conversions, and that asymmetry has remained in the code since the conversion income limit was removed in 2010.
What is the pro-rata rule?
For purposes of taxing a conversion, the IRS aggregates all of your Traditional, SEP, and SIMPLE IRAs and treats them as a single account. If any portion of that aggregate is pre-tax, the same proportion of your conversion becomes taxable. A taxpayer converting $7,500 while holding $67,500 of pre-tax money in a rollover IRA has a pre-tax ratio of 90 percent, and therefore owes tax on $6,750 of the $7,500 converted.
How do I avoid the pro-rata rule?
The cleanest remedy is to move the pre-tax IRA balances into your employer's 401(k) before executing the backdoor Roth, because balances held in a qualified plan are excluded from the pro-rata calculation and most plans accept incoming rollovers. The alternative is to convert the entire pre-tax balance and pay the resulting tax in a single year, which some high earners find worthwhile in a year of unusually low income.
Do I have to file Form 8606?
Yes. Form 8606 is the mechanism by which you report the non-deductible contribution and establish your basis, and without it the IRS holds no record that the money was already taxed. The practical consequence of omitting the form is that the same dollars can be taxed a second time on withdrawal.
Can my spouse do a backdoor Roth if they do not work?
Yes. A non-working spouse may fund an IRA on the strength of the working spouse's earned income and then convert it under the same four steps, which doubles the household's annual Roth capacity. The pro-rata calculation is performed separately for each spouse, on that spouse's own IRAs, because IRAs are individual accounts and are never aggregated across a married couple.