This article is educational and is not financial, tax, or legal advice. Backdoor Roth conversions have real tax implications, especially under the pro-rata rule, so consult a qualified tax professional or fee-only financial planner about your specific situation before acting.

A backdoor Roth is a legal workaround that lets high earners fund a Roth IRA even when they earn too much to contribute directly. You make a nondeductible contribution to a traditional IRA (which has no income limit), then convert that money to a Roth IRA. It is not a special account; it is a two-step maneuver using accounts that already exist.

If you're exploring the nuts and bolts of Financial Independence, Retire Early (FIRE) culture, you know there will come a point where you'll need to withdraw money from your invested assets. You'll start to care more about taxes, and the Roth IRA is a gem in this department because its investments grow tax-free. But it has an income cap.

For high-earning professionals, the backdoor Roth is one of the few remaining ways to get after-tax money growing tax-free for life. Here's how it works.

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What is a backdoor Roth IRA?

A backdoor Roth IRA is a two-step process: contribute to a nondeductible traditional IRA, then convert those dollars into a Roth IRA. Because there is no income limit on traditional IRA contributions or on Roth conversions, high earners locked out of direct Roth contributions can still get money into a Roth this way. The IRS has repeatedly acknowledged the strategy as permissible (IRS, Form 8606 instructions).

Who needs a backdoor Roth?

You need the backdoor if your income is above the Roth IRA limit but you still want Roth's tax-free growth. In 2026, direct Roth contributions phase out between $153,000 and $168,000 of modified AGI for single filers, and between $242,000 and $252,000 for married couples filing jointly (IRS). Earn above the top of your range and you become ineligible for Roth contributions, which is where the backdoor strategy comes in.

How does a backdoor Roth work, step by step?

You contribute after-tax money to a traditional IRA, then convert it to a Roth, ideally before it earns much. The traditional contribution is nondeductible—you've already paid tax on it—so converting it to Roth generates little or no additional tax (as long as the pro-rata rule does not apply). You report both steps on IRS Form 8606 (IRS).

What is the pro-rata rule, and why does it matter?

In the pro-rata rule, the IRS treats all your traditional, SEP, and SIMPLE IRAs as one pool, so you cannot convert only the after-tax dollars. Every conversion is a proportional blend of pre-tax and after-tax money, measured by your total IRA balance on December 31 (IRC Section 408(d)(2); IRS Form 8606). If you hold pre-tax IRA money, part of your tax-free conversion becomes taxable.

How much can you put into a backdoor Roth in 2026?

The same annual IRA limit applies: $7,500 in 2026 if you are under 50, $8,600 if you are 50 or older. There is no separate, larger cap for the backdoor route; the limit is per person, so a married couple can each do one for up to $15,000 combined (IRS). A related-but-distinct mega backdoor Roth uses after-tax 401(k) contributions and can move far more, but it requires specific plan features.

How to do a backdoor Roth, step by step

The mechanics are simple once the pro-rata question is settled. A clean sequence:

1. Check that you actually need to do one. Confirm your 2026 modified AGI is above your Roth limit ($168,000 single / $252,000 married filing jointly).
2. Clear out pre-tax IRA balances first if you can. For example, roll an existing traditional or rollover IRA into your current employer's 401(k) so the pro-rata rule does not tax your conversion.
3. Open a traditional IRA and a Roth IRA at the same brokerage if you do not already have them.
4. Contribute up to $7,500 ($8,600 if 50+) to the traditional IRA as a nondeductible contribution. Do not deduct it on your taxes.
5. Convert the balance to your Roth IRA, ideally soon after the money settles so little or no earnings accrue.
6. File IRS Form 8606 for the tax year to report the nondeductible contribution and the conversion. This is required even if no tax is due.
7. Repeat each year you remain over the income limit.