Backdoor Roth IRA Calculator: Pro-Rata Tax Check

Disclaimer: This calculator is provided for educational and estimation purposes only and does not constitute formal tax advice. The backdoor Roth is a well-established strategy, but Congress has proposed restricting it, and the pro-rata rule has real edge cases — confirm the current rules with a tax professional.

What this calculator actually answers

The backdoor Roth is a two-step tax move: contribute to a Traditional IRA without taking the deduction, then convert that contribution to a Roth. The trick works because the IRS limits direct Roth contributions by income but places no income limit on conversions. The hidden cost is the pro-rata rule, which can make a surprisingly large slice of the conversion taxable — and this calculator exists to show you that number before you commit.

On the defaults — the 2026 limit of $7,500, a $20,000 pre-tax IRA balance, 7% return, 30 years — the conversion is 27.3% tax-free basis, which means $5,455 of the $7,500 is taxable income this year. The full $7,500 still lands in the Roth and grows to $60,874 by retirement, but the tax bill is real money today. That tension — clean growth after, messy tax now — is the whole story of the strategy.

The two-step move, in order

The mechanics matter because the order determines the tax. The move is:

1. Contribute up to $7,500 (2026) to a Traditional IRA as a nondeductible contribution, using IRS Form 8606 to track the basis. You get no tax deduction; that is the price of entry.
2. Convert the contribution to a Roth IRA. The converted amount is taxable except for the basis — the part the pro-rata rule lets through tax-free.

The contribution limit is shared with the Roth vs. Traditional IRA calculator’s account — $7,500 for 2026, $8,600 at 50+ — because a backdoor Roth is just a Traditional IRA contribution followed immediately by a conversion. The income limit that blocks a direct Roth is the reason the backdoor exists at all: the phaseout for 2026 begins at $153,000 for single filers and $242,000 for married filing jointly, and above those ranges the direct route is fully closed.

The pro-rata rule, made concrete

Here is the trap. The IRS does not track which dollars you convert. Every conversion pulls a proportional slice of your entire Traditional IRA balance — the pre-tax money from old rollovers and deductible contributions right alongside the fresh nondeductible contribution. The tax-free share is:

$$\text{Basis fraction} = \frac{\text{nondeductible contribution}}{\text{total Traditional IRA balance}}$$

and the taxable portion is everything else:

$$\text{Taxable} = \text{conversion} \times \left(1 - \frac{\text{basis}}{\text{total balance}}\right)$$

With a $20,000 pre-tax balance, the $7,500 contribution makes the total $27,500, so the basis fraction is $7,500 / $27,500 = 27.3%. The remaining 72.7% — $5,455 — is ordinary income in the year of the conversion. The table shows how the balance scales:

Pre-tax IRA balance	Basis share	Taxable now
$0	100%	$0
$20,000	27.3%	$5,455
$50,000	13.0%	$6,522
$100,000	7.0%	$6,977

The contribution is the same $7,500 in every row; only the pre-tax balance changes. At $100,000 of pre-tax IRA, the backdoor converts $6,977 of taxable income — the “clean” backdoor is gone, replaced by a tax bill that defeats the point. Anyone with a large pre-tax IRA balance should read the pro-rata row before doing the move.

The fix: a 401(k) rollover first

The pro-rata rule has an off switch. Because it only counts Traditional, SEP, and SIMPLE IRA balances, pre-tax money rolled into an employer 401(k) is no longer in the calculation. The standard fix is:

1. Roll the pre-tax IRA balance into your current 401(k), if the plan accepts incoming rollovers.
2. Convert the now-empty Traditional IRA to a Roth. With no pre-tax balance left, the basis fraction is 100% and the whole conversion is tax-free.
3. Repeat annually, keeping the Traditional IRA empty between conversions.

That is why the 401(k) calculator matters to this strategy: a 401(k) is not just a retirement account, it is the holding pen that keeps the backdoor clean. Employer plans often have worse investment options than an IRA — the trade is accepting those options in exchange for keeping the backdoor tax-free.

What the growth is actually worth

Once the contribution lands in the Roth, the math is the same tax-free compounding as any Roth account: $7,500 at 7% grows to $60,874 over 30 years, with no tax ever assessed on the gains. Compare that with the same money in a taxable brokerage account, where growth is taxed as capital gains on the way out — the comparison the Roth vs. Traditional IRA calculator makes for the direct contribution case.

The contribution’s real value is the tax-free status, not the $7,500. A single $7,500 conversion at 7% is worth $30,291 after 20 years and $60,874 after 30 — a $30,583 difference that comes purely from ten extra years of untaxed compounding, with no additional contribution. Every dollar of that growth is untaxed, which is the entire reason high earners run the two-step rather than settling for a taxable account. To check whether you are actually on track toward a retirement balance that makes conversions like this worth doing, the retirement savings by age calculator runs the same compounding math against the 1×/3×/6×/8×/10× salary benchmark at every milestone age.

Where the assumptions break

• The tax bill is real money now. The model shows the taxable amount but does not price the tax itself — that depends on your marginal rate. At a 32% bracket, the default’s $5,455 taxable portion costs about $1,746 this year. Paying that bill from the conversion itself would shrink the Roth; the model assumes you pay it from other money, which is the standard advice.
• The pro-rata rule aggregates all your IRAs. The model takes one pre-tax balance input, but the IRS counts every Traditional, SEP, and SIMPLE IRA you own. A forgotten SEP IRA from a side business counts against you even if the account you convert is empty.
• Legislation is a live risk. Congress has repeatedly proposed closing the backdoor, most recently in 2021-2022. The strategy is legal today and has survived every attempt, but the rules are not permanent — re-check them before each annual contribution.
• No state tax modeled. The conversion is federally taxable; many states also tax it, and a few have their own quirks. The calculator shows the federal picture only.
• Growth assumes a constant return. One rate for 30 years, no sequence-of-returns risk — the same simplification as every projection on this site. The compound interest calculator shows how sensitive the outcome is to the rate.

None of these make the model wrong; they make it a planning figure that understates the complexity of the move, not the growth. The value is in seeing the taxable portion before you commit — and in confirming that the fix (empty the Traditional IRA) restores the clean conversion.

How to use this calculator

• Annual contribution is the nondeductible amount you plan to convert — up to the 2026 limit of $7,500 ($8,600 at 50+), reduced by any deductible IRA contribution you make the same year.
• Pre-tax IRA balance is the total of all your Traditional, SEP, and SIMPLE IRAs. This is the dial that drives the tax bill. If it is zero, the conversion is clean and tax-free; the larger it is, the more of the conversion is taxed.
• Expected return is the annual rate you expect inside the Roth. 7% is the historical ballpark for an equity-heavy portfolio; the projection shows what the tax-free status compounds to.
• Years to retirement is how long the converted money grows before withdrawal. The longer the horizon, the more the tax-free compounding outweighs the one-time conversion tax.

Run it with your real IRA balance first, and then with zero — the gap between the two is the pro-rata tax you can eliminate with a 401(k) rollover. That number, not the growth projection, is what decides whether the backdoor is worth doing this year.