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Retirement learning center · reviewed October 10, 2026

Learn about backdoor Roth planning

Start with the question you need to answer today. These guides explain the concepts behind the workspace and help you gather reliable inputs.

2025 standard rules · 2026 form projections

12 matching guides

Basics · 2025 / 2026

What is a backdoor Roth IRA?

A commonly used sequence is a nondeductible traditional IRA contribution followed by a Roth conversion. Each step has its own eligibility and reporting rules.

Worked context

Start by separating your contribution tax year from your conversion calendar year.

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IRS source

Related: Basics glossary

Tax allocation · 2025; 2026 estimate

How the pro-rata rule works

After-tax basis is allocated across eligible IRA distributions and conversions. A separate account does not isolate basis.

Worked context

$7,000 basis, $7,000 conversion and $21,000 year-end value allocate $1,750 of basis to the conversion; $5,250 is taxable.

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IRS source

Related: Tax allocation glossary

Reporting · 2025; 2026 estimate

IRA basis and carryforward

Basis tracks IRA money that has already been taxed. Preserve records so later distributions do not tax that money twice.

Worked context

Compare prior Form 8606 line 14 with the next year opening basis before adding new contributions.

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IRS source

Related: Reporting glossary

Reporting · 2025; 2026 estimate

Form 8606 explained

The form reports nondeductible contributions and calculates the taxable portions of relevant IRA transactions. Spouses report their own IRA activity separately.

Worked context

Gather prior basis, contribution designations, distributions, conversions and year-end account values before preparing the form.

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IRS source

Related: Reporting glossary

Tax allocation · 2025; 2026 estimate

December 31 balance timing

The allocation uses the relevant year-end IRA value, together with distributions and conversions. Account closure earlier in the year does not establish the year-end total.

Worked context

A new IRA rollover later in the conversion year can change the outcome. Test several year-end balances in the simulator.

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IRS source

Related: Tax allocation glossary

Rollovers · 2025 / 2026

SEP and SIMPLE IRA considerations

Traditional SEP and SIMPLE IRA holdings can affect the allocation. SIMPLE transfers also require a timing review.

Worked context

Include every applicable personal IRA statement, then confirm the SIMPLE participation date before considering a plan rollover.

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IRS source

Related: Rollovers glossary

Basics · 2025 / 2026

Conversion versus contribution

A contribution adds money subject to annual eligibility limits. A conversion moves existing retirement money into Roth treatment and may create taxable income.

Worked context

A contribution designated for 2025 and a conversion completed during 2026 have different reporting years.

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IRS source

Related: Basics glossary

Rollovers · 2025 / 2026

Investigating a reverse rollover

An employer plan may accept eligible pre-tax IRA amounts. Ask about acceptance, documentation, fees and investment options before moving assets.

Worked context

Get written plan confirmation; this guide distinguishes a possible legal destination from administrator acceptance.

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IRS source

Related: Rollovers glossary

Planning · 2025 / 2026

Roth conversion tax consequences

Taxable conversion income can cross federal brackets. Its wider effects depend on your full return and benefits.

Worked context

Compare a planned conversion with a smaller conversion while keeping baseline taxable income fixed.

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IRS source

Related: Planning glossary

Reporting · 2025 / 2026

Common filing mistakes

Missing basis records, transaction-year mismatches and inconsistent custodian documents deserve review before filing.

Worked context

A Form 5498 may arrive after the filing deadline. Preserve contribution confirmations and reconcile when it arrives.

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IRS source

Related: Reporting glossary

Distributions · 2025 / 2026

Roth conversion five-year rules

Qualified Roth distributions and early distributions of converted amounts use different five-year rules. Ordering, age and exceptions matter.

Worked context

Do not infer withdrawal eligibility from conversion tax alone. Review the distribution rules and consult your preparer.

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IRS source

Related: Distributions glossary

Tax allocation · 2025; 2026 estimate

Examples for different IRA situations

Start with a clean-basis example, then add year-end IRA holdings and ordinary distributions to see how the shared denominator changes.

Worked context

$4,000 basis, $6,000 conversion, $2,000 other distributions and $12,000 year-end balance produce $4,800 taxable conversion and $2,400 remaining basis.

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IRS source

Related: Tax allocation glossary

Tax glossary

Basis
Previously taxed IRA contributions tracked for tax allocation.
Conversion
A retirement account transaction moving money to Roth treatment.
Pro-rata allocation
An allocation of basis across eligible IRA distributions.
Reverse rollover
A commonly used term for an IRA-to-employer-plan rollover.
Incremental tax
The modeled tax increase from additional taxable income.

Explore a live example

Change the December 31 value, then compare the result with the worked example above.

Open interactive pro-rata example

Reviewed October 10, 2026. IRS reference. 2026 Form 8606 output is a planning estimate based on the 2025 structure.

A useful reading order

Read the pro-rata overview, review your basis records, then open the Form 8606 guide. Use the mistakes and deadlines guides before taking action.

  • New to IRA basis? Open the basis tracker guide.
  • Considering a rollover? Review receiving-plan eligibility first.
  • Preparing for a tax appointment? Use document readiness.

From reading to review

Save a list of unresolved questions as you work. The educational pages provide a vocabulary for a conversation with your tax adviser.

Sources and next steps

Reviewed October 10, 2026. This independent educational website is not affiliated with the IRS. Special transactions need professional review.

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