Backdoor Roth workaround when you don't have a 401K

You’re right to focus on the pro rata rule, especially since all of your Traditional IRAs are generally treated as one combined account for this purpose. Being self-employed can make the available options a little more complicated, particularly when the goal is a backdoor Roth strategy.

Your follow-up makes sense as well. If the Hidden Backdoor Roth approach is simpler and accomplishes what you’re trying to achieve without taking on unnecessary complexity or fees, simplicity can be a real advantage. The best approach ultimately depends on your specific accounts, tax situation, and eligibility.If you’d like to discuss your circumstances further, feel free to reach out. A qualified tax or financial professional can review the full picture and help determine which strategy is appropriate

I believe you can open a solo 401k and roll all your IRAs in so that you can do backdoor Roth conversions without pro rata tax issues.

Just need to make sure you set up 401k to allow roll-ins. You can also set up the solo 401k to allow mega back door Roth conversions.

So for example you can do:

• Up to $24,500 pre-tax in solo 401k
• Up to $47,500 after-tax 401k contributions which can be converted to Roth immediately ("mega" backdoor Roth)
• AND $7,500 into a regular IRA and concert that to Roth for "regular" back door Roth

= a total of $55k / year in Roth and $24,500 in pre-tax contributions.

Lots of conditions apply. Like for example, you need to have that much available in self employment income. You should talk to your cfp and not take my word as a stranger on the internet 😊

But I personally do all of the above through my employer plan + regular IRA. It's an awesome way to supercharge tax advantaged investments.

You are correct that the pro rata rule requires treating all of your traditional IRAs as a single combined entity, meaning that you can't work around it by opening a new traditional IRA.

I am assuming that you are interested in a back door Roth IRA contribution because you exceed the income level for making a deductible traditional IRA contribution.

You could tackle this in a few different ways:

• Just sock the money away in a taxable brokerage (this has the advantage of being quite a bit more flexible in terms of accessing the funds in early retirement)
• Open up a Solo 401(k) and contribute to that. I've had Solo 401(k) accounts with both Vanguard and Schwab. They are super easy to setup, requiring a 5-ish page form, and they give you all the benefits of being able to contribute as the employer AND the employee, as well as the flexibility of being able to contribute either traditional or Roth.
• If you aren't above the deduction limit for the Traditional IRA contribution, you could also just contribute to the Traditional IRA and take the deduction.