How to Calculate Pro Rata on Backdoor Roth Conversion
by
Backdoor Roth IRA Pro-Rata Rule Calculator
This calculator helps you estimate the taxable portion of your Backdoor Roth IRA conversion due to existing Traditional IRA or SEP IRA balances. The pro-rata rule requires that any conversion from a non-deductible Traditional IRA to a Roth IRA must be taxed on the portion that represents pre-tax money. This includes the unrealized gains within your Traditional IRA accounts.
function calculateProRata() {
var traditionalIraBalance = parseFloat(document.getElementById("traditionalIraBalance").value);
var nonDeductibleContributions = parseFloat(document.getElementById("nonDeductibleContributions").value);
var conversionAmount = parseFloat(document.getElementById("conversionAmount").value);
var taxableAmount = 0;
var resultDiv = document.getElementById("result");
if (isNaN(traditionalIraBalance) || isNaN(nonDeductibleContributions) || isNaN(conversionAmount) ||
traditionalIraBalance < 0 || nonDeductibleContributions < 0 || conversionAmount nonDeductibleContributions) {
var taxablePortionOfConversion = conversionAmount – nonDeductibleContributions;
// We need to consider the pre-tax percentage of the *entire* traditional IRA to get the *overall* pre-tax proportion.
// The pro-rata rule applies to the total balance. So, if 50% of your total traditional IRA is pre-tax,
// then 50% of any conversion is considered taxable.
taxableAmount = conversionAmount * preTaxPercentage;
if (taxableAmount < 0) taxableAmount = 0; // Ensure it's not negative due to rounding
} else {
taxableAmount = 0;
}
}
resultDiv.innerHTML = "
Calculation Results:
" +
"Total Balance in Traditional/SEP IRAs: $" + traditionalIraBalance.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "" +
"Total Non-Deductible Contributions: $" + nonDeductibleContributions.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "" +
"Amount Converted to Roth: $" + conversionAmount.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "";
if (traditionalIraBalance > 0) {
var preTaxPercentageDisplay = ((traditionalIraBalance – nonDeductibleContributions) / traditionalIraBalance) * 100;
resultDiv.innerHTML += "Percentage of Pre-Tax Money in Traditional/SEP IRAs: " + preTaxPercentageDisplay.toFixed(2) + "%";
}
resultDiv.innerHTML += "Estimated Taxable Amount of Conversion: $" + taxableAmount.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "" +
"Note: This is an estimation. Actual taxable amount may vary based on specific tax laws and how your IRA custodian reports balances and gains. Consult a tax professional for personalized advice.";
}
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