Backdoor Roth IRA & Pro-Rata Rule Calculator
Determine exact taxable vs tax-free Roth conversion amounts, calculate Form 8606 liabilities, and model 401(k) reverse rollover shelters.
1. Current Year Non-Deductible Contribution
2. Existing Pre-Tax IRA Balances
Dec 31 SnapshotUnder IRC § 408(d)(2), the IRS sums all your Traditional, Rollover, SEP, and SIMPLE IRAs across all brokerages (Vanguard, Fidelity, Schwab, etc.) as of Dec 31.
3. Tax Bracket & Reverse Rollover
Simulate rolling all pre-tax IRA funds into an employer 401(k) before Dec 31 to zero out pre-tax balances and eliminate pro-rata taxes.
Backdoor Roth Tax Breakdown
$942
13.5% Tax-Free$6,058
86.5% Taxable$1,757
Fed + State Tax$6,058
Carried to Line 14Conversion Composition & Tax Drag
Form 8606 Visual BreakdownIRS Form 8606 Line-by-Line Mapping
| Line | Form 8606 Description | Value |
|---|---|---|
| Line 1 | Current year non-deductible contribution | $7,000 |
| Line 2 | Total unrecovered basis from prior years | $0 |
| Line 3 | Total non-deductible basis (Line 1 + Line 2) | $7,000 |
| Line 6 | Value of all Traditional, SEP, & SIMPLE IRAs on Dec 31 | $45,000 |
| Line 8 | Net amount converted to Roth IRA in tax year | $7,000 |
| Line 11 | Non-taxable portion of Roth conversion | $942 |
| Line 18 | Taxable amount to report on Form 1040 (Line 4b) | $6,058 |
Click "Run Private AI Tax Audit" to evaluate potential Pro-Rata tax traps, Form 8606 basis carryforwards, and step-by-step 401(k) reverse rollover instructions. Your data is processed entirely on your device.
Zero Data Access: All tax numbers and account balances are evaluated 100% locally in your browser. Processed on-device
Understanding the Backdoor Roth IRA and Pro-Rata Tax Trap
What this calculator does
This tool helps high-income earners who exceed the IRS Roth IRA contribution limits evaluate their exposure to the pro-rata tax when executing a backdoor Roth conversion. It is designed for individuals contemplating a non-deductible Traditional IRA contribution who want to ensure their subsequent Roth conversion is fully tax-free. By inputting your non-deductible contribution amount and any existing pre-tax IRA balances (such as a Rollover IRA, SEP IRA, or SIMPLE IRA), the calculator outputs the exact non-taxable and taxable portions of your conversion, alongside an estimated tax bill. It also models the powerful strategy of a 401(k) reverse rollover to shield your pre-tax assets.
For instance, if you are also navigating self-employment retirement plans, you might want to compare your options with our Solo 401(k) vs SEP IRA calculator, as a Solo 401(k) can be a crucial tool for executing a reverse rollover.
How the math works
The calculator accurately applies the mathematical framework defined in IRC §408(d)(2) and reported on IRS Form 8606. Under this statute, the IRS aggregates the balances of all your Traditional, SEP, and SIMPLE IRAs as of December 31st of the conversion year.
The tax-free percentage of your conversion is determined by dividing your total non-deductible contributions (your "basis") by the total combined balance of all your IRA accounts. For the 2026 tax year, the calculator uses this proportional ratio to split your conversion into a tax-free return of basis and a taxable distribution of pre-tax funds. If you have a zero pre-tax balance on December 31, 2026, the ratio is 100%, and the conversion is completely tax-free.
Worked example
Consider an engineer named Sarah who earns $250,000 in 2026 and decides to make a $7,000 non-deductible contribution to her Traditional IRA, planning to convert it to a Roth IRA immediately. However, Sarah also holds a $43,000 Rollover IRA from a past job.
Based on Form 8606 logic, the IRS calculates her total IRA pool as $50,000 ($43,000 pre-tax + $7,000 after-tax). Her tax-free ratio is therefore $7,000 divided by $50,000, or 14%. When she converts the $7,000, only $980 (14%) is tax-free. The remaining $6,020 (86%) is added to her ordinary taxable income for the year, unexpectedly generating over $1,400 in additional federal and state income taxes. This scenario perfectly illustrates the pro-rata tax trap.
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Frequently Asked Questions
What is the Backdoor Roth IRA Pro-Rata Rule?
The IRS Pro-Rata Rule mandates that when converting funds from a Traditional IRA to a Roth IRA, you cannot isolate just your non-deductible (after-tax) contributions. The IRS treats all your pre-tax IRA accounts as a single aggregated pool. Your conversion is taxed proportionally based on the ratio of pre-tax to after-tax dollars in that total pool.
What date does the IRS look at for the Pro-Rata Rule balance?
The IRS calculates your pre-tax IRA balance as of December 31st of the calendar year in which the Roth conversion takes place, not the balance on the day you executed the conversion.
How can I eliminate the Pro-Rata Rule tax on a Backdoor Roth?
You can eliminate the pro-rata tax by executing a 'Reverse Rollover'—rolling over all existing pre-tax Traditional, Rollover, and SEP IRA funds into an employer-sponsored 401(k) or Solo 401(k) before December 31st. Employer 401(k) plans are qualified under IRC Section 401(a) and are excluded from Form 8606 calculations, effectively resetting your IRA pre-tax balance to zero.
Do Roth 401(k) or traditional 401(k) balances trigger the Pro-Rata Rule?
No. Traditional 401(k), Roth 401(k), 403(b), and 457(b) balances are completely excluded from the IRA Pro-Rata calculation. Only Traditional IRAs, Rollover IRAs, SEP IRAs, and SIMPLE IRAs are counted by the IRS.
Educational use only: This material is for scenario-analysis only and does not constitute tax, legal, or investment advice. Always consult a licensed CPA or tax advisor for guidance on your specific situation. Figures reflect 2026 statutory limits and are subject to change.
Built and verified by The Core-AI Engineering Desk — last reviewed August 31, 2026. Calibrated strictly to 2026 statutory figures.