Two issues cause the vast majority of backdoor Roth conversion mistakes. The first is the pro-rata rule under IRC Section 408(d)(2). The IRS does not let you treat your new nondeductible Traditional IRA contribution as a separate, isolated pool of money. Instead, it aggregates every Traditional, SEP, and SIMPLE IRA you own and calculates what percentage of your total IRA balance is after-tax versus pre-tax. That percentage applies to any conversion, meaning if you have an old rollover IRA full of pre-tax 401(k) money, a real chunk of your “tax-free” backdoor conversion will actually be taxable.

The second issue is IRS Form 8606, which reports both nondeductible IRA contributions and Roth conversions. Skipping this form – or filing it incorrectly – means the IRS has no record that you already paid tax on part of your IRA money. Years later, at withdrawal, that missing paper trail can result in being taxed a second time on money that was never tax-deductible in the first place.

For 2026, the contribution feeding into this process is $7,500 ($8,600 if 50+), and it becomes relevant once your income exceeds the direct Roth IRA limits of $153,000-$168,000 (single) or $242,000-$252,000 (married filing jointly), per IRS Notice 2025-67. Getting the pro-rata calculation and Form 8606 right is what separates a clean backdoor Roth from an expensive mistake.

FAQ

Can I fix a missed Form 8606 from a prior year? Yes, you can file it late or use Form 8606 to correct your basis retroactively, though it’s worth confirming the details with a tax professional.