The backdoor Roth is simple. One old account makes it expensive.

Why the back door exists at all

A Roth IRA is the account most therapists want and many are not allowed to have. You put in money already taxed, it grows, and nothing is taxed on the way out. The catch is an income limit, and a private practice that is going well crosses it.

For 2026 the ability to contribute directly phases out between $153,000 and $168,000 of modified adjusted gross income if you file single or head of household, and between $242,000 and $252,000 filing jointly. Filing separately it phases out between $0 and $10,000, which is a polite way of saying no.^[1]

The back door is the workaround, and it is two steps:

• Contribute to a traditional IRA and take no deduction. There is no income limit on a non-deductible contribution. For 2026 that is $7,500, or $8,600 from age 50.^[1]
• Convert it to a Roth. There is no income limit on a conversion either.

Money you were not allowed to put in the front door is now inside. Nothing about this is aggressive or obscure; it is the ordinary interaction of two rules.

The rule that reaches back

Here is where it goes wrong, and it goes wrong quietly, months later, on a form.

The tax code does not see your IRAs as separate accounts. For working out what a distribution or conversion costs, every traditional, SEP and SIMPLE IRA you own is treated as one pot. You cannot convert the clean $7,500 and leave the old money alone, because as far as the arithmetic is concerned there is no clean $7,500 — there is one balance, part after-tax and part before, and anything you take out comes out in that proportion.^[3]

Form 8606 is where this becomes concrete. Line 6 asks for:

Two things in that sentence cost money.^[2] All — traditional, SEP and SIMPLE together. And December 31 — not the day you converted, not the day you contributed. The year’s closing balance is the denominator, whatever the account looked like in March.

What it costs, on real numbers

A therapist contributes $7,500 non-deductible and converts it the same week. Clean, textbook, no tax expected. She also has a $60,000 traditional IRA from a job she left in 2014 and has not thought about since.

The tax-free share of the conversion is her after-tax basis over everything: $7,500 ÷ ($60,000 + $7,500).

So $6,667 of the $7,500 is taxable income. At a 24% federal and 9.3% California marginal rate that is about $2,220 in tax on a move she was told was tax-free.

The remaining $833 of basis does not vanish — it carries forward on Form 8606 and comes out tax-free eventually. But “you get it back over the next twenty years” is a poor answer to a bill due in April.

The escape hatch, and its deadline

The denominator counts IRAs. It does not count employer plans. A 401(k) balance is invisible to line 6.

Which gives the fix its shape: if you have a solo 401(k) — and a therapist with self-employment income can open one — and the plan accepts incoming rollovers, moving the old pre-tax IRA into it empties the pot. Denominator zero, conversion fully tax-free.

The deadline is the part people miss. It is not “before you convert”. It is before 31 December of the year you convert, because that is the date line 6 measures. A conversion in March and a rollover in November still work. A conversion in March and a rollover next February do not.

The same date runs in the other direction, which is the trap nobody warns about. Do a clean backdoor Roth in March with no IRA balance at all, then open a SEP-IRA in November because an accountant suggested it, and you have retroactively made March taxable. The SEP counts. It was not there when you converted and it does not matter.

What this page is not telling you

Whether to do it at all. The back door is worth the trouble when you expect your retirement tax rate to be at or above today’s, and it is a wash or worse when you do not — and that is a forecast rather than a calculation.

Nor is it the biggest lever available to a self-employed therapist. $7,500 into a Roth is a good habit; a solo 401(k) takes $24,500 of salary deferral in 2026 before any employer contribution, and it is the account that actually moves a tax bill.^[1] The back door is a supplement to that, not a substitute for it.

And this is the point in an article where you would normally be told to consult a professional. Do — but go in knowing the one question that decides your answer: what is the total balance of every traditional, SEP and SIMPLE IRA in your name? If it is not zero, the clean version of this manoeuvre is not available to you until it is.