Why This Tool Exists
Backdoor Roth works cleanly when your IRA balances are clean. When they are not, the pro-rata rule decides what is taxable.
This tool is built to make the rule legible: plug in your year-end IRA balance, your nondeductible basis, and your conversion amount. Then you get a directional taxable estimate and a checklist to keep your paperwork clean.
Pro-Rata Calculator (Planning)
Estimate taxable vs nontaxable conversion amounts using year-end IRA balances and basis.
| Line item | Amount | Execution note |
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How Pro-Rata Works (Execution-First)
The IRS looks at all Traditional, SEP, and SIMPLE IRA balances as one combined bucket for this calculation.
Your basis is spread across the whole bucket. That means the conversion is partly taxable and partly nontaxable based on the ratio of basis to total IRA value.
The year-end balance matters. You cannot fix a pro-rata surprise after the year ends without changing facts.
Common Mistakes
Forgetting a SEP or SIMPLE IRA balance that triggers pro-rata taxation.
Not tracking basis cleanly from year to year (Form 8606 matters).
Assuming the conversion is tax-free because the contribution was nondeductible.
Execution Notes
If you want clean backdoor Roth execution, discuss your IRA balance strategy with your advisor before December.
Save your inputs, year-end statements, and Form 8606 history in one folder.
Treat this as a planning estimate. Final numbers depend on your actual 12/31 balances and your filed forms.
Documentation Checklist (Keep It Defensible)
- Create a one-page objective memo before you execute (what outcome you are trying to buy).
- Store your assumptions and calculations in a dated PDF (no year-end reconstructions).
- Keep evidence in the same folder structure every month (receipts, logs, approvals).
- Ask your CPA what would make this easy to sign off on, then build that packet.