If your income exceeds the Roth IRA contribution limit — $161,000 for single filers and $240,000 for married filing jointly in 2026 — you cannot contribute directly to a Roth IRA. The IRS phases out eligibility starting at $146,000 (single) and $230,000 (married).
But there’s a legal workaround that has been in use since 2010 and has survived every tax reform since: the backdoor Roth IRA.
What the backdoor Roth IRA actually is
It’s not a special account type. It’s a two-step transaction:
- You contribute to a traditional IRA (no income limit for contributions, only for deductibility)
- You immediately convert that traditional IRA to a Roth IRA
Because the contribution was non-deductible (you didn’t get a tax break going in), and because you convert it before it earns anything, you owe essentially zero tax on the conversion. The money is now in a Roth IRA and will grow tax-free.
Congress has known about this strategy for years. There have been attempts to close it — most recently in the 2021 Build Back Better bill — but as of 2026, it remains fully legal.
The step-by-step process
Step 1: Open a traditional IRA if you don’t have one. Any major broker works — Fidelity, Vanguard, Schwab. Keep it separate from any existing pre-tax IRA (more on why below).
Step 2: Make a non-deductible contribution. The 2026 contribution limit is $7,000 ($8,000 if you’re 50+). You can contribute for a given tax year until the April 15 filing deadline of the following year.
Step 3: Convert immediately. Log into your broker, find the conversion option, and move the full balance to your Roth IRA. “Immediately” matters — if you wait weeks or months, the money earns interest or investment gains, which become taxable at conversion.
Step 4: File Form 8606. This is the critical tax step. Form 8606 tells the IRS that your traditional IRA contribution was non-deductible — meaning you already paid tax on it. Without this form, you’ll pay tax again when you withdraw in retirement. File it every year you do a backdoor conversion.
The pro-rata rule: the one trap that catches people
Here’s where most people get surprised. The IRS does not let you cherry-pick which IRA dollars you convert. If you have pre-tax money in any traditional IRA — including SEP-IRAs and SIMPLE IRAs — the IRS treats your entire IRA balance as a pool, and your conversion is taxed proportionally.
Example: You have $63,000 in a pre-tax rollover IRA from an old 401(k). You contribute $7,000 non-deductible and try to convert just that $7,000. The IRS sees $70,000 total, $7,000 of which is after-tax (10%). So only 10% of your conversion is tax-free — the other 90% is taxable income.
The fix: If you have existing pre-tax IRA balances, consider rolling them into your current employer’s 401(k) before doing the backdoor conversion. Not all 401(k) plans accept rollovers, so check first. If that’s not an option, the backdoor Roth may cost you more in taxes than it saves.
Mega backdoor Roth: the bigger version (if your 401k allows it)
Some 401(k) plans allow after-tax contributions beyond the normal $23,500 employee limit — up to a combined total of $70,000 in 2026 (including employer match). If your plan also allows in-plan Roth conversions or in-service withdrawals, you can convert those after-tax contributions to Roth status.
This is the “mega backdoor Roth.” It can allow contributions of $30,000-$40,000 per year into a Roth account. It requires a very specific 401(k) plan structure — check your Summary Plan Description or ask your HR department directly.
Is the backdoor Roth worth doing?
Yes, for most high earners, if:
- You have no existing pre-tax IRA balances (or can eliminate them)
- You expect your tax rate in retirement to be equal to or higher than it is now
- You want tax-free income in retirement that doesn’t affect Medicare premiums or Social Security taxation
The math is straightforward: $7,000/year in a Roth growing at 7% for 20 years becomes roughly $27,000 — all tax-free. Do this for 20 years and you’ve added well over $300,000 in tax-free retirement assets.
FAQ
Can I do a backdoor Roth IRA if I’m married filing separately?
The income phase-out for married filing separately starts at $0 — meaning you’re phased out from dollar one. The backdoor conversion is still available to you because contribution income limits and conversion rules are separate.
What if I contribute to a backdoor Roth and then the law changes?
Conversions already completed are grandfathered. Future contributions would be affected, but converted balances in your Roth IRA are not at risk.
Can I do a backdoor Roth and a 401(k) in the same year?
Yes. They’re separate accounts with separate limits. Contributing the maximum to your 401(k) does not reduce your IRA contribution limit.
Do I owe state taxes on the conversion?
Depends on your state. Most states follow federal treatment. A handful of states (like Pennsylvania) exclude Roth conversions from state income tax. Check your state’s rules.