How much tax will a backdoor Roth cost me?
Enter your other IRA money and see how the pro-rata rule splits a Roth conversion into a tax-free part and a taxable part, what the tax is, and how to avoid it.
Filing statusMarried filing separately has its own, much lower, Roth income range and is not modelled.
Your age
TAX ON THE CONVERSIONPRO-RATA RULE APPLIES
$1,565
Converting $7,500 with $50,000 of other IRA money makes only 13.04% of it tax-free ($978) and $6,522 taxable: about $1,565 of tax at 24%. Rolling the $50,000 of pre-tax IRA money into an employer 401(k) before December 31 would make the whole conversion tax-free. At a modified AGI of $145,000 you are below the $153,000 where the Roth IRA income limit starts, so you can contribute to a Roth IRA directly and skip the conversion.
Taxable part
$6,522
Tax-free part
$978
Share tax-free
13.04%
Basis carried forward
$6,522
The taxable part of a $7,500 conversion at different IRA balances
$0
$0
$10,000
$4k
$25,000
$6k
$50,000
$7k
$100,000
$7k
$250,000
$7k
With no other IRA money none of it is taxable; with $250,000 of it $7,282 is. At your $50,000 it is $6,522; yours is highlighted.
How Form 8606 comes out
| Line | What it is | Amount |
|---|---|---|
| 1 | Nondeductible contribution this year | $7,500 |
| 2 | After-tax money from earlier years | $0 |
| 3 | Total after-tax money (basis) | $7,500 |
| 5 | Basis, with no contribution counted for last year | $7,500 |
| 6 | Value of all traditional, SEP and SIMPLE IRAs on December 31 | $50,000 |
| 8 | Amount converted to a Roth IRA | $7,500 |
| 9 | Lines 6 + 7 + 8 | $57,500 |
| 10 | Tax-free share: line 5 ÷ line 9 | 13.04% |
| 11 | Tax-free part of the conversion: line 8 × line 10 | $978 |
| 14 | Basis carried forward to next year | $6,522 |
| 17 | Basis in the conversion: line 11 | $978 |
| 18 | Taxable part of the conversion: line 16 − line 17 | $6,522 |
On Form 8606 your $7,500 of basis is 13.04% of $57,500, so $978 of the $7,500 conversion is tax-free and $6,522 goes on line 18 and your tax return.
What moves the needle
Each row re-runs the calculation with one change. Click to apply.How it's computed
FORMULA
Basis = after-tax money from earlier years + this year’s nondeductible contribution (Form 8606, lines 1 to 3)
Year-end value = all traditional, SEP and SIMPLE IRA money + the contribution − what you converted or took out (line 6)
Tax-free share = basis ÷ (year-end value + distributions + amount converted), never above 100% (lines 9 and 10)
Tax-free part of the conversion = converted × share; the rest is taxable (lines 11 and 18)
Tax = taxable part × your bracket; basis left over = basis − (converted + distributions) × share (line 14)
- All traditional, SEP and SIMPLE IRAs are one pool for this rule, valued on December 31. Roth IRAs and employer plans such as a 401(k) are not in it, which is why rolling pre-tax IRA money into a 401(k) before year-end removes it.
- You cannot choose to convert the after-tax dollars first. With $50,000 of other IRA money, the $7,500 converted is a mix in proportion to the whole pool.
- The 2026 IRA contribution limit is $7,500, or $8,600 from age 50, for all IRAs together (IRS Notice 2025-67). The Roth IRA income range for 2026 is $153,000 to $168,000 single and $242,000 to $252,000 joint.
- Growth between the contribution and the conversion, a contribution made between January 1 and April 15 for the prior year, and state tax are not modelled. The tax is the taxable part at one bracket; a large taxable amount can push part of it into a higher one.
- A conversion is reported on Form 8606 for the year of the conversion, and the tax on it is due with that year’s return. Roth IRAs have five-year holding rules that affect early withdrawals of converted amounts and of earnings; see IRS Publication 590-B.
- The default other-IRA balance is an example. Replace it with the total on your December 31 statements.
WORKED EXAMPLE · SAMPLE NUMBERS
Basis: $0 + $7,500 = $7,500. Year-end IRA value: $50,000 + $7,500 − $7,500 converted = $50,000. Share tax-free: $7,500 ÷ ($50,000 + $7,500) = 13.04%. Tax-free part: $7,500 × 13.04% = $978; taxable part $6,522; at 24% the tax is $1,565.
SOURCES
[1]Instructions for Form 8606: Nondeductible IRAsInternal Revenue Service[2]Notice 2025-67: 2026 amounts relating to retirement plans and IRAsInternal Revenue Service[3]Publication 590-A: Contributions to Individual Retirement Arrangements (IRAs)Internal Revenue Service[4]Roth IRAsInternal Revenue ServiceHSBuilt by Hussain Sehorewala · checked against worked examples · Sep 29, 2026
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Questions about this result
A way to get money into a Roth IRA when your income is above the limit for contributing directly. You make a nondeductible contribution to a traditional IRA and convert it to a Roth IRA. For 2026 the direct-contribution limit phases out between $153,000 and $168,000 of modified AGI for a single filer and between $242,000 and $252,000 for a married couple filing jointly.
The IRS treats all your traditional, SEP and SIMPLE IRAs as one pool. After-tax money in the pool comes out tax-free only in proportion to its share of the whole. With $50,000 of pre-tax IRA money and a new $7,500 contribution, only 13.04% of a $7,500 conversion ($978) is tax-free and $6,522 is taxable.
Get the pre-tax money out of the pool before December 31 of the year you convert, most often by rolling it into an employer 401(k) that accepts rollovers. Then the pool holds only after-tax money and the conversion is tax-free. Roth IRAs and employer plans are not part of the pool.
The limit is $7,500 for 2026, or $8,600 if you are 50 or older, for all your traditional and Roth IRAs together. A nondeductible contribution to a traditional IRA is allowed whatever your income, which is what the backdoor uses.
Yes. You file Form 8606 for any year you make a nondeductible contribution or convert, and it is where basis is tracked and the taxable part is calculated. Keep the form: the basis carries forward year after year.
Growth between the contribution and the conversion, state tax, the effect of the extra income on other tax items, and a contribution made between January 1 and April 15 for the prior year. It prices the tax at one bracket you enter.
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