The backdoor Roth trap hiding in your old IRAs

You might have heard how powerful the Roth IRA is. You may have also given up on it because of your income level.

Have you heard of the backdoor Roth? If you earn too much for a direct Roth IRA — over $153,000 single or $242,000 married filing jointly in 2026 — it's the standard workaround.

But be aware of an IRS rule that can quietly turn that tax-free conversion into a taxable one.

How a backdoor Roth works

It's a two-step move.

First, you put money into a Traditional IRA after-tax (no income limit on that),

Then, convert it to a Roth. The conversion is the backdoor — it lands money in a Roth without ever contributing to one directly.

Should you do a backdoor Roth?

The trap: a “tax-free” conversion that isn’t

The backdoor only works tax-free because you already paid tax on the money you put in — converting already-taxed dollars costs nothing.

The catch is the other IRA money you may have never paid tax on yet. When that gets converted, it gets taxed.

And you don’t get to choose which dollars convert. The IRS treats all your Traditional, Rollover, SEP, and SIMPLE IRAs as one pot, and makes you convert the same mix of taxed and untaxed money that’s sitting in it.

Here's an example. Say you’ve got $92,500 of old, never-taxed money in a Rollover IRA, and you add $7,500 of already-taxed money for the backdoor Roth. You’d like to convert just the $7,500 — but the pot is 93% never-taxed money, so the IRS treats 93% of your conversion as never-taxed too, and taxes it. At a 32% rate, your “tax-free” move costs about $2,200.

Are you exposed?

Do you have pre-tax money in any Traditional, Rollover, SEP, or SIMPLE IRA?

If yes, the rule applies — and every conversion you make will be partly taxed until you fix it.

If you have none of those accounts, or they're empty, the rule doesn't affect you and you can stop here.

The fix: get your pre-tax IRA to $0 by December 31

The IRS doesn’t check your balance on the day you convert.

It uses your total pre-tax IRA balance on December 31 (Form 8606, Line 6). Zero that out by year-end and the whole conversion is clean.

The usual way to get there is a “reverse rollover.” Employer plans — 401(k), 403(b), Solo 401(k) — aren’t counted in the pro-rata math, so you move your pre-tax IRA money into your 401(k) before year-end. Call your plan and ask if they accept incoming IRA rollovers; not all do. Self-employed? A Solo 401(k) works the same way.

Don't skip Form 8606. File it every year you do a backdoor Roth — it’s the IRS’s record that your contributions were after-tax.

Why this matters to us

The hard part is just seeing the whole picture. Mezzi links all your IRAs and 401(k)s into one view so you can see which accounts are in the pro-rata calculation, your pre-tax balance across custodians, and whether a reverse rollover would clear your path.

IMPORTANT DISCLOSURES

This content is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security.

Past performance is not indicative of future results. No guarantee of future performance or outcomes is implied.

Savings and performance examples are hypothetical and for illustrative purposes only. Actual results will vary based on individual circumstances, portfolio composition, market conditions, and fees.

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