Backdoor Roth IRAs: How Do They Work?


Roth IRAs are a great tool for setting money aside to be used tax-free in retirement, but there are income limits on Roth IRAs: $140,000 for single filers and $208,000 for joint filers. Fortunately, even if you are above the income threshold, there is still a way to put money into a Roth IRA.

The “Backdoor” Roth IRA is a loophole that allows high earners to make nondeductible contributions to a traditional IRA, then convert it to a Roth IRA. This Kiplinger article explains how the process works and outlines everything you need to know about Backdoor Roth IRAs.

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