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Can I make a backdoor Roth IRA contribution?

| January 24, 2019
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If you earn too much, you are unable to make a regular contribution to a Roth IRA. But there is a workaround called the Backdoor Roth Contribution. There are many complicated steps that must be considered and if done improperly can result in significant penalties for your client.

To help make this easier, we have created the “Can I Make a Backdoor Roth IRA Contribution” flowchart. It addresses common issues that occur when doing a Backdoor Roth IRA: Contribution:

  • Earned income phase-out ranges for the current year
  • Impacts of contributions done after age 70.5
  • Pro-rata rules and the formula to determine the taxable amount
  • Aggregation rules
  • Step-doctrine complication
  • Mechanics of making a Backdoor Roth Contribution
  • Step-by-step process

Updated for 2019

This article represents opinions of the authors and not those of their firm and are subject to change from time to time, and do not constitute a recommendation to purchase and sale any security nor to engage in any particular investment or legal strategy. The information contained here has been obtained from sources believed to be reliable but cannot be guaranteed for accuracy.

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