Backdoor Roth IRA with Traditional IRA Confusion/Advice

[BiggerFishToFI]

Possibly this year and most likely next year we will exceed the income limits for contribution to a Roth IRA.

I currently have a traditional (deductible) IRA valued around 16k. Don't want to roll it into my current employers 401k due to investment choices (If that's even possible?)

Should I look at converting this to a Roth IRA to avoid the pro-rata rule? I don't fully understand it but think that to do the backdoor Roth I would have to pay tax on a portion of my traditional deductible IRA and convert it to a non-deductible IRA?

Thanks in advance!

[MDM]

Should I look at converting this to a Roth IRA to avoid the pro-rata rule?

Yes, look at it - just look closely because it may or may not be a good thing to do.

I don't fully understand it but think that to do the backdoor Roth I would have to pay tax on a portion of my traditional deductible IRA and convert it to a non-deductible [Roth] IRA?

Yes, as edited.

With the current $16K balance, if you contribute a non-deductible $5500 to tIRA this year, and then convert $5500 to a Roth IRA, the IRS will deem that $16K/($16K + $5500) = 74.42% of the $5500 is taxable this year.

See Backdoor Roth IRA - Bogleheads for more.