Backdoor Roth IRA Cheat Sheet (2025)

The Backdoor Roth Cheat Sheet

This guide expands on our article "Backdoor Roth IRAs and the Pro-Rata Rule: What Investors Need to Know" and is designed to serve as a standalone reference for investors.

One of the Most Common Questions:

“Can I still do a backdoor Roth if I have a rollover IRA?”

Short answer: Yes — but only if you navigate the pro-rata rule carefully. Below is a 2025-friendly guide with key limits, deadlines, and a simple step-by-step checklist.

What Is a Backdoor Roth IRA?

The backdoor Roth IRA is a legal strategy that allows high-income earners to contribute to a Roth IRA, even when their income exceeds the IRS limits for direct contributions.

Here’s how it works:

1. Make a non-deductible contribution (after tax dollars) to a Traditional IRA.

2. Convert that money to a Roth IRA, usually right away.

3. It’s simple in theory, but there are traps. Chief among them? The pro-rata rule.

2025 Contribution & Income Limits

• Traditional IRA Contribution (Under 50): $7,000

• Traditional IRA Contribution (Age 50+): $8,000

• Roth IRA Direct Contribution Phase-Out (Single): Begins at $150,000

• Roth IRA Direct Contribution Phase-Out (Married Filing Jointly): Begins at $236,000

If your income exceeds the phase-out thresholds, you can’t contribute directly to a Roth IRA, which is why the backdoor strategy exists.

Important: These contribution limits apply per person. Married couples can each contribute to their own Traditional IRA, even if only one spouse has earned income (via a spousal IRA), as long as household income qualifies.

Timing & Deadlines

Traditional IRA Contribution Deadline (for 2025): April 15, 2026

Roth Conversion Timing: There’s no official IRS deadline for Roth conversions, but they’re taxed based on the calendar year the conversion happens, not the year of the contribution.

Example:If you make a 2025 contribution in early 2026 but convert it later that year, the conversion is taxed in 2026 (not 2025).

Best Practice:Whenever possible, contribute and convert in the same calendar year to simplify tax reporting and minimize the risk of unintended taxable growth.

The Pro-Rata Rule (And Why It Matters)

If you have any pre-tax IRA balances (including Traditional IRAs, rollover IRAs, SEP or SIMPLE IRAs) the IRS will look at all of your IRA money combined when you do a Roth conversion.

This means even if your new contribution is after-tax, a big chunk of your conversion could still be taxed.

Example:

• You contribute $7,000 after-tax to a Traditional IRA.

• You also have $100,000 in a pre-tax rollover IRA.

• Total IRA balance = $107,000.

• Only 6.5% of your Roth conversion would be tax-free. The remaining 93.5% would be taxed as ordinary income.

Backdoor Roth IRA Checklist

Step 1: Confirm your income is over the Roth limit. Over $146,000 (single) or $230,000 (joint)? You’re in backdoor territory.

Per-Spouse Rules:The backdoor Roth process is executed individually, not jointly.

• Each spouse must make their own Traditional IRA contribution.

• Each spouse evaluates their own IRA balances for the pro-rata rule.

• Each spouse must file Form 8606 to track their contributions and conversions.

Step 2: Check for any pre-tax IRA balances. Do you have rollover, SEP, or SIMPLE IRAs with pre-tax money? These trigger the pro-rata rule.

Step 3: Make a non-deductible Traditional IRA contribution. Up to $7,000 (or $8,000 if age 50+). Use after-tax dollars.

Step 4: File IRS Form 8606. This is required to report your non-deductible contribution and track your basis. Don’t skip it.

Step 5: Convert to Roth IRA. Ideally convert right away, before any growth occurs. Remember: the conversion is taxed in the year it happens.

Step 6: Deal with existing pre-tax IRAs. You have three options:

• Reverse rollover into a 401(k) or 403(b), if your plan accepts it.

• Convert the full IRA balance to Roth — but prepare for a tax hit.

• Gradually convert over time, knowing the pro-rata rule will apply until it’s all converted.

Tip: You Can Still Contribute Without Converting

Even if you can’t convert yet because of an existing IRA balance, you can still make the non-deductible Traditional IRA contribution now. You’ll preserve the contribution space and can convert later when the timing makes more sense.

Written by Carson McLean, CFP®Founder of Altruist Wealth Management, a flat-fee, fiduciary financial planning firm helping clients nationwide navigate retirement, tax, and investment strategies with clarity and confidence.

Disclosure: This content is for informational and educational purposes only and should not be construed as personalized tax, legal, or financial advice. You should consult a qualified professional regarding your unique situation before taking any action.