A backdoor Roth IRA is a strategy rather than an official type of individual retirement account. It is a technique used by high-income earners—who exceed Roth IRA income limits—to convert their traditional IRA to a Roth IRA. The backdoor Roth IRA strategy is not a tax dodge.
Could a backdoor Roth IRA benefit high-income earners?
A backdoor Roth IRA could benefit high-income earners. A "backdoor Roth IRA" is just a name for a strategy of converting nondeductible contributions in a traditional IRA to a Roth IRA. The strategy can be helpful for those who earn too much to contribute directly to a Roth IRA.
Can you contribute to a Roth IRA in a backdoor?
Each year in which you can’t fully contribute to a Roth IRA by the regular, front-door way, take advantage of the backdoor Roth. The age at which you must start taking required minimum distributions (RMDs) from a traditional IRA. You’ll want to ensure you abide by the IRS -specified rules for your Roth IRA.
