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What is a Backdoor Roth IRA?

A Backdoor Roth IRA is a strategy that allows individuals who earn too much to contribute directly to a Roth IRA to still contribute to one. It involves making a non-deductible contribution to a Traditional IRA and then converting that amount to a Roth IRA.
There are no income limits on Roth conversions, which is why higher-income earners commonly use this approach. Once funds are in the Roth IRA, future qualified withdrawals may be tax-free.