There's a pro rata rule for backdoor Roths The IRS requires rollovers from traditional IRAs to Roth IRAs to be done pro rata. Here's how it works: When determining your tax bill on a conversion from a traditional IRA to a Roth IRA, the IRS is going to look at all of your traditio...
You’ll also owe taxes on whatever money that IRA contribution earned between when it was contributed to the traditional IRA and when you converted it to a Roth IRA.1However, if you make after-tax contributions to a traditional IRA—that is, contribute funds that are nondeductible and taxable...
1) No, you don’t need to consider the pro-rata rule that factors in your pre-tax IRA funds into the calculation. 2) The pro-rata rule for Roth conversions is separate between 401k and IRAs, and it’s separate within the 401k when you only convert non-Roth after-tax contributions and...