Backdoor Roth & Pro-Rata Calculator

The pro-rata rule flows from IRC §408(d)(2), which requires aggregating all Traditional, SEP, and SIMPLE IRAs when computing the taxable portion of a distribution or conversion. IRS Form 8606 Part I implements the statute as a ratio:

Three practical consequences: (a) you cannot "convert just the after-tax portion" — the IRS spreads basis across every aggregated dollar; (b) the December 31 balance matters, not the balance on the conversion date, so last-minute rollouts can fail; (c) basis that doesn't come out in the current conversion carries forward to next year and reduces future conversion taxes proportionally.

Counted in the pro-rata pool: Traditional IRAs (all of them, across all institutions), traditional SEP IRAs, and traditional SIMPLE IRAs. A traditional SIMPLE IRA counts even during its first two years; that rule limits transfer destinations, not Form 8606 aggregation.

Not counted: 401(k), 403(b), 457(b), Thrift Savings Plan, Solo 401(k), defined-benefit pensions — any employer-qualified plan. Also: Roth IRAs, Roth SEP and Roth SIMPLE IRAs, inherited IRAs from someone other than your spouse (they're tracked separately), and your spouse's IRAs (each spouse has their own pro-rata pool).

This account boundary is why an accepting workplace plan can change the conversion-year IRA pool: eligible pretax IRA money received by the plan is outside Form 8606 aggregation, while documented basis remains in the IRA.

The conditional move: confirm that a workplace plan accepts the exact IRA source, then request a direct rollover of the eligible pretax amount. If it is completed by December 31 of the conversion year, the smaller year-end IRA pool can affect a conversion that occurred earlier in that calendar year. Basis cannot move to the plan.

Prerequisites: (1) your employer's plan must accept rollovers from Traditional IRAs — not all do, and those that do often require a specific paperwork path. (2) Only pre-tax dollars are eligible to roll into a 401(k); non-deductible basis must be left behind or rolled to Roth IRA. (3) The receiving plan must complete the rollover by December 31 for it to affect that year’s modeled balance; processing time is plan-specific. (4) A traditional SIMPLE IRA still inside its two-year period generally cannot be transferred tax-free to a non-SIMPLE destination; confirm the first-deposit date and the IRS SIMPLE rollover rules before attempting that cleanup.

Drawbacks: The receiving plan controls its investment menu and distribution rules. You also lose access to IRA-only penalty exceptions such as first-time-home and higher-education distributions on money moved into the plan.

The Internal Revenue Code separately governs eligible Traditional IRA contributions and Roth conversions; neither provision sets a federal minimum time between them. The 2017 Tax Cuts and Jobs Act conference report described taxpayers making nondeductible IRA contributions and later converting them. That is legislative history—not an IRS ruling, a named statutory approval of the “backdoor Roth,” or a safe harbor.

The account value can change between the two transactions. Timing does not replace the contribution, pro-rata and reporting rules, and a contribution designated for one tax year can be converted in a later calendar year.

There is no statutory waiting-period safe harbor. Taxpayers who are concerned about transaction-specific facts can ask a qualified adviser rather than treating a particular number of days as an IRS rule.

For backdoor-Roth purposes, Form 8606 is generally required for a year in which you: (a) make a nondeductible traditional IRA contribution; (b) convert traditional IRA money to Roth; or (c) receive a traditional IRA distribution while your basis is greater than zero. The instructions list additional events, including certain Roth IRA distributions. Carrying basis through an otherwise inactive year does not by itself require a new Form 8606.

Part I computes the nontaxable fraction and amount of your distributions and conversions. Line 14 is residual traditional-IRA basis; carry it to line 2 the next time Part I applies, even if inactive years intervene. Keep the prior Forms 8606 and supporting records.

Part II reports the Roth conversion: line 16 is the converted amount, line 17 is its nontaxable amount—generally carried from Part I line 11—and line 18 is the taxable amount. Part III handles Roth IRA distributions, not the conversion itself.

The current final Form 8606 instructions list a $50 failure-to-file penalty and a $100 basis-overstatement penalty, absent reasonable cause. A missing form does not itself turn historically after-tax dollars into pretax money, but uncertain basis should be reconstructed from prior returns, Forms 5498, account records and contribution confirmations rather than guessed.

Even for married-filing-jointly couples, IRAs are owned individually and the pro-rata aggregation is computed separately for each spouse. With enough joint-return compensation, each spouse may make a separate eligible Traditional IRA contribution up to that spouse’s unused annual IRA room and may later convert eligible dollars. Only the spouse whose own IRA pool contains pretax money bears that pro-rata drag; each spouse keeps separate Form 8606 records.

Inherited IRAs from a non-spouse also stay out of your aggregation — they're tracked under a separate basis pool owned by you as beneficiary.

Three situations where this calculator may show near-zero benefit:

• Large pre-tax IRA balance you can't roll out. If your employer plan won't accept rollover-ins and you have substantial pre-tax IRA balances, every backdoor conversion will be mostly-taxable. You're just paying income tax now to move money from a Trad IRA to a Roth IRA — which may or may not beat leaving it in the Trad IRA, depending on your current vs. future marginal rate.
• You'll be in a lower bracket in retirement. The backdoor converts at today's marginal rate. If retirement rates will be meaningfully lower, a non-deductible Traditional IRA contribution with no conversion (or a Roth 401(k) contribution via work) may dominate.
• Your MAGI is below the direct-contribution cliff. If your MAGI is already inside the phase-out or below it, you can contribute directly to Roth IRA up to your reduced limit — no backdoor needed. Check the MAGI Estimator.

• IRC §408(d)(2) — pro-rata aggregation of IRA distributions
• IRC §408A(d)(3) — conversion rules and the 2010 removal of the income limit on Roth conversions
• IRS Form 8606 (current year) Parts I–III, and the Form 8606 Instructions
• IRS Publication 590-A — contributions to IRAs (non-deductible contribution rules)
• IRS Publication 590-B — distributions from IRAs (pro-rata examples)
• IRC §408(d)(3)(A)(ii) and IRS Publication 590-A — eligible IRA-to-plan rollover amounts; actual plan acceptance remains plan-specific
• TCJA 2017 Conference Report — legislative history describing nondeductible IRA contributions followed by Roth conversions; not a statutory safe harbor or IRS ruling
• 2026 IRA contribution limits: IRS Notice 2025-67 ($7,500 base, $1,100 catch-up for age 50+)

This tool applies entered federal and state marginal rates to the modeled taxable conversion amount; it does not calculate total tax liability or withholding. It also does not model NIIT (§1411), state-specific modifications to Roth conversion income, or Medicare IRMAA surcharges that may apply when conversion income crosses MAGI thresholds. Consult a tax professional for your full situation.