The “Back Door” Roth Contribution

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The Roth IRA presents a great opportunity to put money away for retirement and withdraw it all, free of tax. However, the ability to make such contributions is determinate on income. Many taxpayers find themselves unable to contribute to a Roth because their incomes are too high. As a result, such taxpayers are limited to contributing to a traditional, nondeductible IRA, which is far less tax-favorable than the Roth.

To address this, various articles have appeared describing what is called a “back door” Roth contribution – basically advising taxpayers to contribute to a traditional nondeductible IRA and then …read more

Read more here: Government Contracting

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