What is the two-step process for a backdoor Roth and where do people mess it up?

Step one: make a nondeductible contribution to a Traditional IRA (you skip the deduction because your income is too high for a direct Roth). Step two: convert that money to a Roth IRA. Because you already paid tax on the contribution, the conversion should be nearly tax-free. The classic mistakes: forgetting to file Form 8606 to report the nondeductible basis, which risks double taxation; leaving pre-tax money in other IRAs and getting caught by the pro-rata rule; and letting the contribution sit and grow before converting, which creates a small taxable gain. Convert promptly and keep good records. High earners locked out of direct Roth contributions rely on this maneuver; verify eligibility rules at irs.gov.