How to Convert a Traditional IRA Into a Roth IRA

By Felix Thorpe · Retirement Accounts WriterPublished October 8, 2026

A backdoor Roth conversion lets you move money from a traditional IRA into a Roth IRA when your income is too high to contribute directly

A backdoor Roth conversion is a two-step process: you contribute money to a traditional IRA (which has no income limit), then convert that money to a Roth IRA. The IRS allows this conversion regardless of how much you earn. The conversion itself is taxable in the year you do it, but once the money is in the Roth, future growth and withdrawals are tax-free.

The strategy exists because the IRS sets income limits on direct Roth contributions but not on conversions. If your modified adjusted gross income exceeds the limit for your filing status, you cannot contribute directly to a Roth. A backdoor conversion gets around that limit by using the traditional IRA as a holding account.

The process takes a few weeks and involves paperwork from your IRA custodian and a tax form (Form 8606) when you file. The main risk is the pro-rata rule, which can create unexpected tax bills if you have other traditional IRAs with pre-tax money in them.

Key Takeaways

You can do a backdoor Roth conversion at any income level by contributing to a traditional IRA first, then converting it to a Roth within weeks or months.
The conversion is taxable in the year you do it, but you only pay tax on the amount converted, not on future growth inside the Roth.
If you have other traditional IRAs, SEP-IRAs, or SIMPLE IRAs with pre-tax balances, the pro-rata rule will force you to pay tax on a portion of the conversion.
You must report the conversion on Form 8606 when you file your tax return, or the IRS may treat the money as a taxable distribution instead.
The entire process—contribution, conversion, and tax reporting—must happen in the same calendar year to count as a backdoor Roth for that year.

Step-by-step process for a backdoor Roth conversion

Start by opening a traditional IRA if you do not already have one. You can open one at the same institution where your Roth IRA is held (Fidelity, Vanguard, Charles Schwab, or another custodian), or at a different one. The custodian will ask for your name, Social Security number, and address. There is no cost to open the account.

Contribute money to the traditional IRA. You can contribute up to $7,000 in 2024 (or $8,000 if you are age 50 or older), regardless of your income. Write a check, transfer funds electronically, or deposit cash. Keep a record of the contribution date and amount—you will need this for your tax return.

Wait a few days for the money to settle in the account. Then contact your Roth IRA custodian and request a conversion. You will fill out a conversion form that asks how much money you want to move from the traditional IRA to the Roth. If the traditional IRA is at a different institution, you may need to request a direct transfer instead, which the two custodians handle between themselves.

The conversion is complete once the money lands in your Roth IRA. This usually takes one to two weeks. At that point, the traditional IRA balance is zero (or close to it), and the Roth IRA balance is higher by the amount you converted.

How the pro-rata rule affects your tax bill

The pro-rata rule is the biggest trap in a backdoor Roth. If you have any traditional IRAs, SEP-IRAs, or SIMPLE IRAs with pre-tax money in them on December 31 of the year you convert, the IRS treats all your IRAs as one pool for tax purposes. You cannot convert only the after-tax money and leave the pre-tax money behind.

Here is a concrete example: suppose you have a traditional IRA with $50,000 in pre-tax contributions (from old 401(k) rollovers), and you contribute $7,000 of after-tax money to a new traditional IRA and convert it to a Roth. The pro-rata rule says you have $57,000 total in traditional IRAs, of which $50,000 is pre-tax. That means 87.7% of your conversion is pre-tax money. You owe income tax on $6,139 of the $7,000 conversion, even though you only converted the after-tax $7,000.

The pro-rata rule applies to the calendar year in which you do the conversion. If you have pre-tax IRAs on December 31, the rule applies. If you roll those pre-tax IRAs into a 401(k) plan before you convert, you remove them from the calculation—many people do this in late December to avoid the pro-rata hit.

Check your IRA statements and any old 401(k) rollover paperwork before you start a backdoor Roth. If you have pre-tax balances, talk to a tax professional about whether rolling them into a 401(k) makes sense for your situation.

Tax reporting and Form 8606

You must report the conversion on Form 8606 (Nondeductible IRAs) when you file your tax return for the year of the conversion. This form tells the IRS how much you contributed to the traditional IRA, how much was pre-tax versus after-tax, and how much you converted to the Roth.

If you do not file Form 8606, the IRS may treat the conversion as a taxable distribution instead of a conversion. This can result in double taxation or penalties. Even if you owe no tax on the conversion (because all the money was after-tax), you still must file the form.

Your IRA custodian will send you a Form 1099-R in January showing the conversion. The form will show the gross amount converted and may show a taxable amount, depending on what the custodian knows about your other IRAs. Do not rely on the 1099-R to calculate your tax—use Form 8606 and your own records to get the numbers right.

Timing and calendar-year rules

The entire backdoor Roth process must happen in the same calendar year. You contribute to the traditional IRA in, say, March, and you must convert it to the Roth by December 31 of that same year. If you contribute in 2024 but do not convert until January 2025, the contribution counts as a 2025 contribution, and the conversion counts as a 2025 conversion—they are separate tax years.

There is no rule saying you must wait a certain number of days between contribution and conversion. You can contribute on a Monday and convert on a Tuesday. However, waiting a few days lets the money settle and gives you time to double-check the account numbers and amounts before you submit the conversion request.

You can do a backdoor Roth conversion every year, as long as you stay within the annual contribution limit ($7,000 or $8,000 depending on age). Some people do one every January; others do one every December. The timing does not matter as long as both steps happen in the same calendar year.

When a backdoor Roth does not make sense

If you have a large pre-tax IRA balance, a backdoor Roth conversion may trigger a large tax bill. In the pro-rata example above, converting $7,000 costs $6,139 in taxes. That is 88% of the amount converted—a steep price. If your goal is to move money into a tax-free account, paying that much tax upfront may not be worth it.

If you are in a very high tax bracket in a particular year, you might delay the conversion to a year when your income is lower. For example, if you are between jobs or have a lower-income year, that might be a better time to convert and pay the tax at a lower rate.

If your employer offers a 401(k) plan with a Roth option, you may be able to contribute directly to a Roth 401(k) without income limits. This avoids the backdoor Roth process entirely. Check your plan documents or ask your benefits administrator whether a Roth 401(k) is available to you.

Common mistakes to avoid

The most common mistake is forgetting to file Form 8606. Without it, the IRS may treat the conversion as a taxable distribution, and you could owe tax twice or face penalties. File the form even if you owe no tax on the conversion.

Another mistake is not checking for other IRAs before you convert. If you have a SEP-IRA or SIMPLE IRA from a self-employed business, or a rollover IRA from an old 401(k), the pro-rata rule applies. Many people discover this too late and end up with an unexpected tax bill.

A third mistake is converting money that is still in the traditional IRA on December 31. If you contribute $7,000 in December but do not convert until January, the contribution and conversion happen in different tax years. This can create confusion on your tax return and may trigger IRS questions.

Finally, do not assume your custodian will calculate the tax correctly on Form 1099-R. The custodian may not know about your other IRAs or your pre-tax balances. You are responsible for reporting the correct amount on Form 8606, even if the 1099-R says something different.

Frequently Asked Questions

Can I do a backdoor Roth if I have a 401(k) at work?

Yes. A 401(k) does not count toward the pro-rata rule—only IRAs do. You can have a 401(k), do a backdoor Roth conversion, and owe no extra tax from the pro-rata rule. However, if you have a traditional IRA with pre-tax money, that IRA does count, regardless of whether you also have a 401(k).

What if I contribute to a traditional IRA but change my mind before converting?

You can withdraw the contribution before you convert it. If you withdraw it in the same year you contributed, you can file Form 8606 to report that the contribution was returned, and you owe no tax. However, any earnings on the contribution are taxable if you withdraw them. It is simpler to just convert the full amount and pay the tax.

Do I have to convert the entire traditional IRA, or can I convert just part of it?

You can convert part of a traditional IRA and leave the rest. However, the pro-rata rule still applies to the part you convert. If you have $50,000 pre-tax and $7,000 after-tax, and you convert only the $7,000, you still owe tax on 87.7% of it.

What happens if I convert in December but the money does not arrive in the Roth until January?

The conversion date is when you submit the conversion request to your custodian, not when the money arrives. If you request the conversion in December, it counts as a December conversion, even if the money settles in January. Keep documentation of when you submitted the request.

Can I do a backdoor Roth if I am self-employed?

Yes, but check whether you have a SEP-IRA or Solo 401(k) first. A SEP-IRA counts toward the pro-rata rule. A Solo 401(k) does not. If you have a SEP-IRA with pre-tax money, you may want to roll it into a Solo 401(k) before you do the backdoor Roth conversion to avoid the pro-rata hit.