Concept · Account placement
What is a backdoor Roth, and what is the mega version?
Direct answer A two-step route into a Roth IRA for people above the income limit: contribute to a traditional IRA with no deduction, then convert it to Roth. The 2026 limit is $7,500. The mega version runs through a 401(k) that allows after-tax contributions up to the $72,000 total-additions ceiling, converted to Roth inside the plan.
Both routes survived the 2025 tax act. The mega version depends on the plan document allowing after-tax contributions and in-plan conversions; not every plan does. Read fill the sheltered slots before adding taxable money.
Sources
- IRS Notice 2025-67, 2026 plan limitsirs.gov
- IRC §408A, Roth IRAslaw.cornell.edu
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