Can I Make a Backdoor Roth IRA Contribution?

If your client earns too much, they 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
  • 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 2020 (Includes updates fo The SECURE Act)