Backdoor Roth IRA Calculator
Calculate your exact Backdoor Roth IRA tax liability, see how the IRS pro-rata rule applies to your existing pre-tax IRAs, and verify Form 8606 conversions instantly.
How to Use This Calculator
- Enter your nondeductible contribution: Enter the after-tax cash deposited into your Traditional IRA for the tax year (standard cap is $7,000 for 2024–2026, or $8,000 if age 50 or older).
- Enter your existing pre-tax IRA balances: Sum the total fair market value of all Traditional, Rollover, SEP, and SIMPLE IRAs you hold as of December 31. Do not include Roth IRAs or active employer 401(k) accounts.
- Specify the conversion amount and tax rate: Enter how much you convert to your Roth IRA, and input your combined federal and state marginal income tax bracket.
- Review your pro-rata verdict and Form 8606 statement: Check your exact immediate tax bill, non-taxable recovery ratio, remaining IRA basis, and line-by-line Form 8606 filing entries.
The Formula & Pro-Rata Rule Mechanics
Under Section 408(d)(2) of the Internal Revenue Code, the IRS treats all of a taxpayer's non-Roth IRAs (Traditional IRAs, Rollover IRAs, SEP IRAs, and SIMPLE IRAs) as a single aggregated pool. When a conversion occurs, funds are pulled pro-rata from after-tax basis and pre-tax earnings.
Taxable Conversion Calculation:
Variable Explanations:
- Total After-Tax Basis: Sum of your current year nondeductible contribution plus any unrecovered after-tax basis tracked on Line 14 of prior-year Form 8606 filings.
- Total Pre-Tax Balance (Dec 31): The total balance of all pre-tax IRAs on the last day of the calendar year. The IRS looks at your account balances on December 31, not the day of the conversion!
- Non-Taxable Ratio: The fraction of your conversion that represents basis recovery and is completely exempt from income taxes.
- Remaining Basis: Any after-tax basis not recovered during the conversion carries forward to shield future distributions or conversions from tax.
Example Scenario
Consider Jordan, a high-earning software engineer who earns $240,000 and is ineligible to make direct Roth IRA contributions due to the IRS Modified AGI phaseout limits:
- New Nondeductible Contribution: $7,000 contributed to a Traditional IRA.
- Existing Rollover IRA Balance: $63,000 sitting in a Rollover IRA from an old 401(k).
- Amount Converted: $7,000 converted from Traditional to Roth IRA.
- Marginal Tax Bracket: 32% (Federal + State combined).
Step 1: Calculate the Total IRA Pool (Form 8606 Line 9):
Step 2: Determine the Non-Taxable Ratio (Form 8606 Line 10):
Step 3: Calculate Taxable Amount and Immediate Tax Due:
Verdict: Because Jordan holds $63,000 in a pre-tax rollover IRA, the pro-rata rule taxes 90% of the conversion ($6,300), creating an unexpected $2,016 tax liability. However, Jordan still retains $6,300 of unrecovered basis carrying forward on Form 8606. If Jordan instead rolled the $63,000 rollover IRA into an active employer 401(k) prior to December 31, the pre-tax balance would drop to $0, and the entire $7,000 conversion would be 100% tax-free.