Backdoor Roth Checklist

⚠️ Surprising fact: Only 15-25% of eligible high income earners actually use the Backdoor Roth!

Who this is for:

High-income earners who are not eligible to deposit the maximum annual contribution directly into a Roth IRA on account of IRS income limits.

For the 2026 tax year, the maximum contribution to IRAs and Roth IRAs per individual is:

• $7,500 (under age 50)

• $8,600 (age 50 or older, including catch-up contributions)

Step 1: Confirm a Backdoor Roth Makes Sense for You

1. Your income is above the Roth IRA income limits

2. You do not have pre-tax IRA balances as of December 31:

   • Traditional IRA

   • Rollover IRA

   • SEP IRA

   • SIMPLE IRA

⚠️ If you do have one of these, the strategy may still make sense for you — but it could require extra planning.

Step 2: Make a Non-Deductible IRA Contribution

• Open a Traditional IRA (we set up a dedicated account for each client’s annual Backdoor Roth)

• Contribute up to the annual IRA limit

• Contribution is considered after-tax (non-deductible)

• Funds are left in cash initially

Step 3: Transfer to a Roth IRA

• Open a Roth IRA for use with your annual Backdoor Roth operations

• Transfer the contribution from the Traditional IRA to the Roth IRA

• Carry out the transfer soon after the contribution

• The transfer is processed as a Roth conversion (not a withdrawal)

• A few pennies of interest earned before conversion is acceptable*

Step 4: Invest Inside the Roth

• Confirm Traditional IRA balance is $0

• Roth IRA reflects converted funds

• Invest according to your long-term investment plan

Step 5: Tax Filing (Critical)

• Enter information from Form 1099-R into your tax return

• File Form 8606 with your tax return

• Contribution is reported as non-deductible

• Conversion is reported correctly

• Taxable amount is ~$0 (aside from minor interest, if any)

📄 Keep copies of Form 8606 permanently.

Step 6: Repeat Annually

• Reconfirm eligibility each year

• Check for new IRA balances before year-end

• Repeat the process annually if appropriate

Good to know

• Each spouse must complete this process separately

• A non-earning spouse is not excluded from doing a Backdoor Roth IRA as long as the couple has sufficient earned income and files jointly

• Contributions to a 401(k) retirement plan do not affect this strategy

• Timing flexibility is allowed, but accuracy matters

*Tip: If a few pennies of interest are left over in the IRA, we ask our custodian to net them to zero.