Backdoor Roth IRA Contributions(p6)

Certain age and Income limitations apply to Roth IRA contributions. When a tax payer is subject to those limits or they've excluded from making contributions altogether, they can still put their money into their IRA through a technique called Backdoor IRA contribution.

• With this strategy, filers can benefit from the future tax savings of a Roth IRA account.

  
  

• A back door Roth IRA contribution is when an individual who isn't eligible to contribute to a Roth IRA makes non deductible contributions to a traditional IRA and then, within a year, converts the traditional IRA to a Roth IRA.

This is a good strategy when the filers income exceeds the limits set by the IRS for a direct contributions to a Roth IRA.