What is a backdoor Roth IRA, and how does it work?
A backdoor Roth IRA is not an account. It is an informal name for a two-step sequence: making a nondeductible contribution to a traditional IRA, then converting that amount to a Roth IRA. It exists because income limits restrict who may contribute to a Roth IRA directly, while there is no income limit on converting.
The sequence is straightforward. The tax result is not. How much of the conversion is taxable depends on your basis and on the balances in your other traditional, SEP and SIMPLE IRAs — not on which account the converted dollars came out of.
It is a reporting-sensitive transaction that belongs in front of a qualified tax professional before it happens, not after.
Reviewed by Bay Area Wealth Advisors. Last reviewed 2026-09-16. Educational information only — not individualized financial, tax or legal advice.