# Backdoor Roth IRA

> A backdoor Roth IRA is a two-step way for people above the Roth income limits to fund a Roth: make a nondeductible contribution to a traditional IRA, then convert it to a Roth.

Canonical page: https://find.wellspent.co/glossary/backdoor-roth/
Also called: backdoor Roth, nondeductible IRA conversion

It works because a traditional IRA contribution has no income limit (only the tax deduction does), and conversions have no income limit either. In 2026 the IRA contribution limit is $7,500, plus $1,100 if you are 50 or older. The name is informal: the IRS treats it as a nondeductible contribution followed by a conversion, both reported on Form 8606.

The trap is the pro rata rule. When you convert, the taxable share is figured across all of your traditional, SEP, and SIMPLE IRA balances at year end, not just the new contribution. If you already hold $92,500 of pre-tax IRA money and add $7,500 after tax, 92.5% of any conversion is taxable. Rolling pre-tax IRA money into a current employer's 401(k) first, if the plan accepts it, is the usual way around this, because 401(k) balances don't count.

Done with no other pre-tax IRA money, the tax cost is small: only any earnings between the contribution and the conversion.

## How to check

Before contributing, add up every traditional, SEP, and SIMPLE IRA you own, including old rollover IRAs. If the total is above zero, have an advisor or tax preparer run the Form 8606 math first.

## Sources

- [IRS: 2026 401(k) and IRA limits (Nov. 13, 2025)](https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500)
- [IRS Topic 309: Roth IRA contributions](https://www.irs.gov/taxtopics/tc309)
- [IRS Publication 590-A: Contributions to IRAs](https://www.irs.gov/publications/p590a)
- [IRS Publication 590-B: Distributions from IRAs](https://www.irs.gov/publications/p590b)

## Related terms

- [Roth conversion](https://find.wellspent.co/glossary/roth-conversion.md)
- [Rollover](https://find.wellspent.co/glossary/rollover.md)
- [Asset location](https://find.wellspent.co/glossary/asset-location.md)