Sunday, April 1, 2012

Back Door Roth IRA contribution

If you want to contribute to a Roth IRA, but your income is above the phase-out, there is a workaround.

Due to too much income  Roth contributions are phased out. But you may  qualify (earned income, etc.) to make traditional contributions. With no more phase-outs for CONVERSIONS, you can  first contribute to a traditional IRA, then  convert to a Roth immediately. If  there are no other traditional contributions over the years, you won't have to worry about earnings, ratios of with-vs-without basis, etc. 
Back door Roth.

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