What about a Backdoor Roth??
First, let’s clear up the misconception about a ROTH IRA.
You can make a ROTH IRA contribution even if you make too much money!
HOW?
Many people make too much money to contribute to Roth IRAs, but here’s a way to sneak in the back door anyway.
How about a Backdoor Roth?
Why the backdoor?
The front door for Roth’s is out of order for single people earning more than $146,000 and married people making more than $240,000.
But, there’s a simple detour to get in through the backdoor: Put money in a traditional IRA, then immediately convert it into a Roth IRA, getting all the benefits of the Roth. Better get it done now before another loophole gets closed by President’s Executive Order.
While most loopholes have some caveats (and this one is no exception), this strategy has gained much popularity.
If you have no other IRAs, it’s simple. If you have other IRAs, calculating your tax bill that year will be a bit more complicated because of some of the IRS rules governing conversions.
Regardless, the Backdoor Roth is well worth investigating to sneak into tax-free retirement income.
Just like sneaking into your friend’s house for the first time when you were 12, you are going to need a guide to get you in and make sure you don’t stumble or fall sneaking through the backdoor and saving for your future.
One of the ways we help our clients is by working hard to provide tax-smart investment strategies to minimize the impact Uncle Sam can have on your bottom line. We are also responsible for educating you about things that could affect your financial future. If you have any questions about your taxes or how tax-efficient planning can help reduce your tax burden, please call us. We also recommend that you speak with a qualified tax professional who can advise you on the specifics of your personal tax situation.
Michael Tannery CPA CDFA® AIF® ● CEO
Registered Principal | Tannery & Company
The opinions expressed in this material are for general informational purposes only and are not a substitute for professional advice. Individual circumstances do vary. Independent Financial Group (IFG) does not give tax advice. IFG Registered Representatives (RR) do not provide tax advice while acting as a RR.
