Backdoor Roth Strategy Guide

Step 1: Confirm your income exceeds the Roth IRA direct contribution limit
Step 2: Make a nondeductible Traditional IRA contribution
Step 3: Convert the Traditional IRA to Roth IRA
Step 4: Report on Form 8606 with your tax return
Step 5: Repeat annually and track your basis

A step-by-step guide to the backdoor Roth strategy with a pro-rata rule calculator

The backdoor Roth is a two-step strategy that lets high earners contribute to a Roth IRA regardless of income. Make a nondeductible Traditional IRA contribution, then convert it to a Roth IRA. Be aware of the pro-rata rule if you have existing Traditional IRA balances.