{"id":45380,"date":"2019-06-05T15:27:24","date_gmt":"2019-06-05T20:27:24","guid":{"rendered":"https:\/\/resource-center.hrblock.com\/?p=45380"},"modified":"2023-03-06T17:36:41","modified_gmt":"2023-03-06T23:36:41","slug":"back-door-roth-ira","status":"publish","type":"post","link":"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/income\/retirement-income\/back-door-roth-ira\/","title":{"rendered":"What is a Back Door Roth IRA?"},"content":{"rendered":"\n

Taxpayers with higher incomes don’t qualify to contribute to a Roth IRA directly. If you’re one of these people, you can still use a Roth IRA account by using what\u2019s known as a back door Roth IRA. <\/span><\/p>\n\n\n\n

You can use a back door Roth IRA by completing these steps:<\/p>\n\n\n\n

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  1. Make a nondeductible contribution to a traditional IRA. This IRA has no income limits preventing you from contributing to it.<\/li>\n\n\n\n
  2. Then, immediately convert the traditional IRA contribution to a Roth IRA.<\/li>\n<\/ol>\n\n\n\n

    Since a conversion doesn’t count as a contribution, your income doesn’t limit it. And, since the IRS already taxed the nondeductible contribution to the traditional IRA, the conversion isn’t taxable.<\/p>\n\n\n\n

    However, there might be taxes on your earnings if step one and step two don\u2019t happen all at once.\u00a0 <\/span>If you make a nondeductible contribution to a Traditional IRA<\/a>, then wait days, weeks, or months before converting to a Roth IRA, you might have accumulated earnings the IRS can tax.\u00a0<\/span><\/p>\n\n\n\n

    Things to remember about Back Door Roth IRA conversions<\/h2>\n\n\n\n

    When you\u2019re reporting a back door IRA, keep these things in mind if you\u2019re using H&R Block\u2019s online program or software: <\/span><\/p>\n\n\n\n