Backdoor Roth IRA Calculator
Backdoor Roth IRA Analysis
Calculate taxes on a backdoor Roth IRA conversion considering the pro-rata rule
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Formula
Taxable Amount = Conversion x (Pre-Tax IRA Balance / Total IRA Balance); Tax = Taxable Amount x Marginal Rate
Frequently Asked Questions
What is a backdoor Roth IRA?
A backdoor Roth IRA is a strategy for high-income earners who exceed Roth IRA income limits. You contribute to a non-deductible traditional IRA, then convert it to a Roth IRA. When done with no existing traditional IRA balance, the conversion is essentially tax-free.
What is the pro-rata rule?
The pro-rata rule requires you to treat all traditional IRA balances (including SEP and SIMPLE IRAs) as one pool when converting. If you have pre-tax money in any traditional IRA, a proportional share of the conversion will be taxable, even if you only convert the non-deductible contribution.
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