Backdoor and Mega-Backdoor Roth

Aggregate IRA basis. Include basis from any earlier current-year nondeductible contribution in the recorded basis field. Form 8606 allocates basis over all traditional, SEP and SIMPLE IRA year-end balances plus the year’s conversions and other distributions. A separate empty IRA does not avoid that aggregate rule. This worksheet assumes contributions made in the conversion calendar year, no outstanding rollovers, repayments or recharacterizations, and conversion tax paid outside the IRA.IRS Form 8606 instructionsIRS Publication 590-A

2026 contribution limits. The IRA limit is $7,500, plus $1,100 at age 50, limited by eligible compensation and other IRA contributions. Employer-plan additions are limited to $72,000 or compensation. Catch-up deferrals are excluded from that annual-additions ceiling. Income eligibility for a direct Roth contribution is a separate question.IRS Notice 2025-67

Plan transfer assumptions. The mega-backdoor example converts the new after-tax amount and the entered associated pretax earnings to Roth. It assumes the plan permits that complete, separately accounted source transfer. Mixed-account partial distributions generally include pretax money pro rata. Splitting pretax money to a traditional destination is a different transaction and may affect a later IRA pro-rata calculation.IRS: after-tax plan rollovers