If you earn a high income (over $168,000 for singles or $252,000 for married couples filing jointly in 2026), the IRS strictly forbids you from making direct contributions to a Roth IRA. The legal workaround is the "Backdoor Roth IRA."
What is a Backdoor Roth IRA?
It is not a specific type of account. It is a multi-step tax strategy where you put money into a Traditional IRA and immediately convert it into a Roth IRA.
Step-by-Step Guide
- Open a Traditional IRA: If you don't have one, open an empty Traditional IRA at your brokerage.
- Make a Non-Deductible Contribution: Fund the Traditional IRA up to the annual limit ($7,500). Do not claim a tax deduction for this contribution when you file your taxes (you will report it on IRS Form 8606).
- Execute the Conversion: Within a few days (before the money has a chance to generate significant interest), instruct your brokerage to convert the entire balance of the Traditional IRA into your Roth IRA.
- Pay the Taxes (Usually Zero): Because you already paid income tax on the money (it was non-deductible), and it hasn't had time to grow, the conversion is a non-taxable event.
The Pro-Rata Rule Warning
The Backdoor Roth only works flawlessly if you have a balance of $0 across ALL of your Traditional, SEP, and SIMPLE IRAs. If you have existing pre-tax money in a Traditional IRA, the IRS forces you to calculate the taxes on a pro-rata (proportional) basis, which can result in an unexpected and hefty tax bill. Consult a CPA before proceeding if you have existing Traditional IRA balances.