Backdoor Roth Calculator: How to Work Out the Tax on Your Conversion

By Kevin Luu, Co-Founder and Chief Learning Officer. Reviewed on 2026-09-30.

A backdoor Roth calculator answers one question: how much of your Roth conversion is taxable. The answer comes from the pro-rata formula on IRS Form 8606, which divides your after-tax basis by the December 31 value of all your traditional, SEP and SIMPLE IRAs plus the amount you converted during the year. If you hold no other pre-tax IRA money and convert quickly, the taxable amount is usually only the few dollars of earnings; if you hold a large rollover IRA, most of the conversion becomes taxable.

You do not need an online tool to run this. You need four numbers and one division, shown below with examples for a two-earner household in California or Washington.

Why high-income W-2 families use the backdoor Roth at all

For 2026, married couples filing jointly cannot contribute directly to a Roth IRA once modified adjusted gross income reaches $252,000; the phase-out runs from $242,000 to $252,000 (IRS Notice 2025-67). A physician and a biotech scientist earning $950,000 together are far above that line. There is no income limit on converting a traditional IRA to a Roth IRA, so the workaround is two steps: make a nondeductible contribution to a traditional IRA, then convert it.

For 2026 the IRA contribution limit is $7,500 per person, plus a $1,100 catch-up at age 50 or older (Notice 2025-67). A married couple can move $15,000 a year into Roth accounts this way. The contribution is not deductible for most families at this income, because the 2026 deduction phase-out for a spouse covered by a workplace plan ends at $149,000 MFJ.

Roth IRAs have no required minimum distributions during the owner’s lifetime (IRS RMD FAQs), which makes them one of the cleaner accounts to leave to children.

The backdoor Roth tax formula, in four inputs

Form 8606 does the math for you each year (Instructions for Form 8606). The inputs are:

1. Basis: this year’s nondeductible contribution plus any basis carried from prior years’ Form 8606.
2. Conversion amount: what you moved to the Roth IRA during the year.
3. Year-end IRA balance: the value on December 31 of every traditional, SEP and SIMPLE IRA you own. This is the input most people forget, and it is measured at year end, not on the day you convert.
4. Your marginal tax rates: federal plus state.

Then:

• Nontaxable share = basis ÷ (year-end IRA balance + conversion amount)
• Taxable conversion = conversion amount × (1 − nontaxable share)
• Estimated tax = taxable conversion × combined marginal rate

The aggregation is per person. Your spouse’s IRAs do not count in your formula, and money in a 401(k) or 403(b) does not count either. Inherited IRAs are also kept out of your own calculation.

Worked example: a $950,000 San Jose household

Assumptions (illustrative): married filing jointly, W-2 income of $950,000, taxable income around $900,000 after deductions. For 2026 that sits in the 37% federal bracket, which starts at $768,700 of taxable income (Rev. Proc. 2025-32). California has not yet published 2026 brackets, so we use the 2025 schedule: the 11.3% bracket covers $891,542 to $1,485,906 for joint filers (FTB 2025 rate schedules). Combined marginal rate: 48.3%.

In Scenario B, the spouse left a former employer years ago and rolled the old 401(k) into an IRA. That single account turns a nearly tax-free move into roughly $3,487 of tax on a $7,500 conversion. The $281.25 of basis that was used stays tax-free; the remaining $7,218.75 of basis carries forward on Form 8606 to future years, so it is not lost, but it is tied up until the pre-tax IRA is gone.

Scenario C is the usual fix. If the current employer’s 401(k) accepts roll-ins, moving the pre-tax IRA into it before December 31 takes it out of the formula. Ask the plan administrator whether roll-ins are allowed and how long the paperwork takes; some plans need several weeks.

The same math applies to each spouse separately. If one spouse is clean and the other has a rollover IRA, the clean spouse can proceed while the other fixes their balance.

California versus Washington: what the state takes

California: the taxable part of a conversion is ordinary income, taxed at your marginal rate. California does not have a lower rate for capital gains (FTB). SDI applies to wages, not to IRA conversions. In a clean backdoor, the state tax is about a dollar; in Scenario B it is about $816 of the total.

Washington: in 2026 Washington does not have an individual income tax, and its capital gains tax exempts retirement accounts (WA DOR). A Seattle family in Scenario B would owe only the federal 37%, about $2,671. That changes from 2028, when Washington’s new 9.9% income tax applies to AGI over $1,000,000 (WA DOR income tax). How retirement distributions and conversions are treated is still pending DOR guidance, so families near $1 million of AGI should revisit this before 2028.

The mega backdoor Roth calculator is a different formula

Searches for “backdoor Roth calculator” often mean the larger version inside a 401(k). The mega backdoor Roth uses after-tax 401(k) contributions, then an in-plan Roth conversion or an in-service withdrawal to a Roth IRA. The pro-rata rule for IRAs does not apply. The room is set by the 2026 total additions limit (Notice 2025-67):

• Total annual additions limit: $72,000
• Minus your elective deferral: $24,500
• Minus employer contributions, for example a $15,000 match
• After-tax room: $32,500

Catch-up contributions at 50 or older sit on top of the $72,000. Only the earnings between the after-tax contribution and the conversion are taxable, so plans that convert automatically keep the tax close to zero. Your plan must allow both after-tax contributions and in-plan conversions or withdrawals; not every plan does, so check your summary plan description. For how this compares with a taxable account, see mega backdoor Roth vs brokerage.

Two spouses who both have access can move $15,000 through IRAs plus up to $65,000 through their 401(k) plans in one year, using the example match above.

Timing and paperwork that trip up busy families

• Deadline: a 2026 IRA contribution can be made until the tax filing deadline in April 2027, not including extensions (IRS Pub 590-A). The conversion counts in the year it happens.
• File Form 8606 every year you contribute or convert. Without it, the IRS has no record of your basis and the whole conversion can look taxable. Your tax preparer needs the Form 1099-R from the conversion and the year-end IRA statements.
• Five-year clock on conversions: if you are under 59½, each conversion has its own five-year period before the part of it that was taxed can be withdrawn without the 10% additional tax, unless an exception applies (IRS Pub 590-B). For the full withdrawal rules, see when you can withdraw from a Roth IRA.
• Watch for new pre-tax IRA money. A job change late in the year that sends a 401(k) into an IRA can break a conversion you already made in January.

The decision to make this year

For most families above the income limit, the question is not whether the backdoor Roth works. It is whether each spouse’s December 31 IRA balance will be zero, and who is responsible for checking. A short checklist:

1. List every traditional, SEP and SIMPLE IRA for each spouse, with current balance.
2. If any pre-tax balance exists, confirm the current 401(k) accepts roll-ins and move it before year end.
3. Contribute $7,500 per spouse (2026) and convert once the cash settles.
4. Check whether your 401(k) supports after-tax contributions and set the mega backdoor amount.
5. Give your preparer the 1099-R and year-end statements, and confirm Form 8606 is filed for both spouses.

What to document for your children

Roth accounts often outlast the parents who funded them. Keep a one-page record: which accounts are Roth, where each year’s Form 8606 is stored, and why you chose Roth money over a taxable account. When your children inherit or manage these accounts, the reasoning is as useful as the balance. Conversations fade. Documentation compounds.

Frequently asked questions

Am I eligible for a backdoor Roth IRA?

Anyone with earned income can make a nondeductible traditional IRA contribution, and there is no income limit on conversions. So a high-income couple is eligible. The real test is whether you hold pre-tax money in traditional, SEP or SIMPLE IRAs on December 31, because that balance determines how much of the conversion is taxed under the pro-rata rule.

Does my 401(k) balance affect the backdoor Roth calculation?

No. The Form 8606 formula only counts traditional, SEP and SIMPLE IRAs you own. Money in a 401(k), 403(b) or 457 plan is excluded, which is why rolling a pre-tax IRA into your current employer’s plan is the standard way to clear the path. Your spouse’s IRAs are also excluded from your calculation.

What if I already converted and have a rollover IRA?

The pro-rata calculation uses the December 31 balance, so you may still have time. If you move the rollover IRA into an employer plan before year end, the year-end balance can drop to zero and most of the conversion becomes nontaxable. After December 31, the taxable amount for that year is fixed.

If you want the numbers run for both spouses, including RSU income and the mega backdoor room in each plan, our tax management and retirement and employee benefits teams can do it as part of the Tax & Wealth Assessment. This is general education; the right move depends on your family’s full picture.

Written by

Kevin Luu

Co-Founder and Chief Learning Officer, Bright Advisers

Kevin has advised high-income W-2 tech and biotech families since 2015, and leads the education-first Age Five Family Office from Brea, California.

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