Backdoor Roth IRA.

In plain English

A backdoor Roth IRA is not a special account. It is a two-step move. You put money into a traditional IRA (which has no income limit on contributions), then you convert that money to a Roth IRA. This sidesteps the income limit that normally blocks high earners from contributing to a Roth directly. The IRS has long treated this as allowed, but it only works cleanly if you have no other pre-tax money sitting in traditional IRAs, because of the pro-rata rule.

01Why it matters

If you earn too much to contribute to a Roth directly, this is often the only way to get money into one, and Roth money grows and comes out tax-free in retirement.

02The math, step by step

You earn above the Roth income limit, so you cannot contribute directly. For 2026 you put up to the annual IRA limit of $7,500 (or $8,600 if you are 50 or older, per irs.gov) into a traditional IRA as a nondeductible contribution, then convert the full amount to your Roth IRA a short time later. Because you already paid tax on that money, the conversion itself triggers little or no extra tax, assuming you hold no other pre-tax IRA balances.

03What this is NOT

04Receipts

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