Backdoor Roth IRA Guide 2025
High earners above the Roth IRA income limit ($165,000 single, $246,000 married in 2025) can still fund a Roth via the backdoor. Step 1: Make a non-deductible traditional IRA contribution ($7,000 for 2025). Step 2: Convert the traditional IRA to Roth immediately. Tax owed: $0 on the conversion if the traditional IRA had no other pre-tax funds (the pro-rata rule). If you have other traditional IRA money, the pro-rata rule applies and you owe taxes on the conversion proportional to pre-tax vs after-tax funds across all your IRAs.
Who can use the backdoor Roth IRA strategy?
Anyone whose income exceeds the Roth IRA phase-out limit ($165,000 single, $246,000 married in 2025) can use the backdoor Roth. You make a non-deductible traditional IRA contribution, then immediately convert it to Roth.
Do I owe taxes on a backdoor Roth conversion?
If your traditional IRA contains only non-deductible (after-tax) contributions and no pre-tax funds, the conversion is tax-free. If you have pre-tax IRA money, the pro-rata rule applies and a portion of the conversion is taxable.