Can My Wife Do a Backdoor Roth IRA? A Complete Guide for Married Couples

You may be wondering if your spouse can use the backdoor Roth IRA strategy. You may have heard of this way to save for retirement but aren’t sure if it works for both of you when you file your taxes together. I have good news: your wife can do a backdoor Roth IRA, even though she doesn’t work. But there are some important things you need to know first.

What Is a Backdoor Roth IRA?

The backdoor Roth IRA is basically a clever workaround for high-income earners who exceed the income limits for direct Roth IRA contributions. For 2025, married couples filing jointly can’t contribute directly to a Roth IRA if their Modified Adjusted Gross Income (MAGI) exceeds $246,000 (the phase-out range starts at $236,000).

This strategy involves two main steps:

1. Making a non-deductible contribution to a traditional IRA
2. Converting those funds to a Roth IRA shortly afterward

The great thing about this method is that you can make non-deductible contributions to a traditional IRA or change a traditional IRA into a Roth IRA no matter how much money you make. This gives high earners a “backdoor” to put money into a Roth IRA.

Can My Wife Do a Backdoor Roth Even If She Doesn’t Work?

Yes! Even if your wife doesn’t have earned income she can still do a backdoor Roth IRA thanks to something called “spousal IRA rules.” These rules allow a working spouse to contribute to an IRA for a non-working spouse as long as

• You file a joint tax return
• The working spouse has enough earned income to cover both contributions

So if you’re earning enough income to cover both contributions (up to $7,000 per person in 2025, or $8,000 for those 50 and older), your wife can absolutely participate in the backdoor Roth strategy.

The Pro-Rata Rule: The Big Gotcha You Need to Know About

Before you and your wife start the backdoor Roth process, you need to understand the pro-rata rule. This is probably the most important consideration when determining if a backdoor Roth makes sense.

The pro-rata rule states that if either of you has existing pre-tax funds in any traditional, SEP, or SIMPLE IRAs, the conversion will be taxed proportionally. The IRS doesn’t let you cherry-pick which dollars you’re converting – they look at your entire IRA balance.

Let me explain with a real example:

Let’s say your wife has $10,000 in an old traditional IRA. The IRS will not see it the way you might think if she adds a new non-deductible $7,000 to a traditional IRA and then tries to change that $7,000 to a Roth IRA.

The IRS says that she has $17,000 in her IRA, with $10,000 (about 58 8%) being pre-tax money and $7,000 (about 41. 2%) being after-tax money. When she converts $7,000, approximately $4,118 (58. 8% of $7,000) will be considered taxable income.

This can create a unexpected tax bill if you’re not prepared for it!

Step-by-Step Guide to Doing a Backdoor Roth IRA for Your Wife

Let’s walk through the process step by step:

1. Check for Existing IRAs

First, determine if your wife has any existing traditional, SEP, or SIMPLE IRAs. If she does, you’ll need to decide how to handle them (more on this later).

2. Open a Traditional IRA

If your wife doesn’t already have one, she’ll need to open a traditional IRA account at a brokerage firm like Vanguard, Fidelity, or similar.

3. Make a Non-Deductible Contribution

Contribute up to the annual limit ($7,000 for 2025, or $8,000 if your wife is 50 or older) to her traditional IRA. This contribution won’t be tax-deductible.

4. Wait a Few Days

While there’s no mandatory waiting period, it’s good practice to wait a few business days for the contribution to settle. This minimizes any investment gains that would be taxable upon conversion.

5. Convert to a Roth IRA

Initiate a conversion of the funds from the traditional IRA to a Roth IRA. This is usually done through a simple option on your brokerage’s website labeled something like “Convert to Roth.”

6. Invest the Money

Once the money is in the Roth IRA, invest it according to your investment strategy. Since Roth funds grow tax-free, many advisors suggest putting high-growth investments here.

7. Document Everything for Tax Time

You’ll need to report both the non-deductible contribution and the conversion on your tax return using Form 8606.

Dealing with Existing Traditional IRAs: Options for Your Wife

If your wife already has traditional IRA assets with pre-tax dollars (which is common), you have several options:

Option 1: Convert Everything

Convert all her traditional IRA funds to Roth IRAs, paying income tax on the full pre-tax amount. This is simplest but could result in a big tax bill.

Option 2: Roll Over to a 401(k)

If your wife has access to an employer 401(k) that accepts incoming rollovers, she could roll over her pre-tax IRA funds into that plan. 401(k) accounts aren’t subject to the pro-rata rule, so this effectively removes those funds from the pro-rata calculation.

Option 3: Gradual Conversions

Convert a portion of her traditional IRA each year, spreading the tax impact over multiple years. However, the pro-rata rule will apply to each conversion until all pre-tax funds are converted.

Tax Reporting for Backdoor Roth IRAs

When filing your taxes jointly, each spouse who did a backdoor Roth must file their own separate Form 8606 (Nondeductible IRAs). Both forms are then attached to your single joint Form 1040.

Form 8606 has two important parts:

• Part I: Reports the non-deductible contributions to traditional IRAs
• Part II: Reports the Roth conversion and calculates its taxability

If your wife has no pre-tax IRA funds, the taxable amount on Form 8606 should be zero (except for any earnings between contribution and conversion). If she has existing pre-tax IRA funds, the pro-rata rule will determine what portion is taxable.

Timing Considerations

You can make IRA contributions for a tax year until the tax filing deadline (typically April 15 of the following year). However, conversions count for the calendar year in which they’re performed.

For example, if your wife makes a 2024 traditional IRA contribution in March 2025 (before the April 15 deadline) and then converts it to a Roth, the contribution is reported on your 2024 tax return, but the conversion is reported on your 2025 return.

Is a Backdoor Roth Worth It for Your Wife?

Let’s consider a real example to see if it’s worthwhile. Say your wife has $25,000 in a traditional IRA with pre-tax funds. If you convert it all to a Roth IRA, you might pay around $6,000 in taxes (assuming a 24% tax bracket).

While that’s a significant upfront cost, the long-term benefits are substantial:

• All future growth will be tax-free
• No required minimum distributions in retirement
• Tax-free withdrawals for your heirs

One community member calculated that for a married couple with 20 years until retirement, the total lifetime tax savings could be around $81,000! That clearly exceeds the one-time conversion tax cost.

Common Mistakes to Avoid

1. Not checking for existing IRAs: Forgetting to account for all IRA accounts when calculating the pro-rata rule impact.

2. Waiting too long between contribution and conversion: The longer you wait, the more likely the funds will grow, creating taxable gains upon conversion.

3. Not filing Form 8606: Failing to document non-deductible contributions can lead to double taxation later.

4. Converting directly to Roth: Making contributions directly to a Roth IRA when your income exceeds the limits will result in penalties.

Real-World Example

Let’s look at a real-world scenario from one of my clients:

John works as a software engineer earning $300,000 annually. His wife Sarah doesn’t work outside the home. Sarah has a traditional IRA with $15,000 from a previous job. They want to maximize their retirement savings using the backdoor Roth strategy.

Here’s what they did:

1. Sarah rolled her $15,000 traditional IRA into John’s employer 401(k) plan that accepted incoming rollovers.

2. They opened a new traditional IRA for Sarah and contributed $7,000.

3. After waiting one week, they converted the $7,000 to a Roth IRA.

4. Since Sarah no longer had any pre-tax IRA balances, the conversion wasn’t subject to the pro-rata rule, making it tax-free.

5. They reported the non-deductible contribution on Form 8606 with their joint tax return.

6. They now repeat this process annually, giving Sarah her own growing Roth IRA even though she doesn’t have earned income.

Yes, your wife absolutely can do a backdoor Roth IRA, even if she doesn’t work. Thanks to spousal IRA rules, you can fund her IRA as long as you have sufficient earned income and file jointly.

The key is to be aware of the pro-rata rule and existing traditional IRA balances. With proper planning, both you and your spouse can benefit from this powerful retirement strategy, potentially saving tens of thousands in taxes over your lifetime.

I recommend consulting with a tax professional before proceeding, especially if your wife has existing IRA assets. The upfront cost of professional advice is tiny compared to the potential tax savings and long-term benefits of properly executed backdoor Roth IRAs for both spouses.