In this video, I’ll cover the Backdoor Roth IRA, which is putting money in a Traditional IRA and then converting it to a Roth IRA. I’ll also explain how to properly execute a Backdoor Roth IRA in 3 easy steps. Later, I’ll share some pitfalls to avoid when doing a Backdoor Roth IRA, and one key advantage of a Roth IRA over other retirement accounts, that you probably don’t know about.
A backdoor Roth IRA is a great way for high-income earners to contribute to a Roth IRA when earning too much to contribute directly. As you probably know, a Roth IRA is a retirement account that is funded with after tax dollars, with the benefit of receiving Tax Free distributions at retirement. It’s a legal tax loophole for high income earners that actually has the thumbs up from Congress and the IRS.
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Do you have questions about Backdoor Roth IRA Explained 2021 (How To Do It In 3 Easy Steps) Explained by CPA. Updated for 2021? I’m an Illinois licensed, Registered Certified Public Accountant with over 25 years of experience. I’m dedicated to providing outstanding tax and accounting services to individuals and small businesses in the Chicago area.
Disclaimer: Any accounting, business or tax advice contained in this article, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, I would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services.