If you make too much money to contribute to a Roth IRA directly, there's a legal workaround that's been on the books for years.
It's called the backdoor Roth IRA, and it lets high earners get money into a tax-free retirement account anyway.
The catch: it involves extra paperwork, a conversion step, and a tax rule that can bite you if you're not careful.
You put money into a traditional IRA, but you don't take the tax deduction.
Then you convert that money into a Roth IRA.
Since you already paid taxes on the contribution, the conversion is usually tax-free.
For 2025, you can move up to $7,000 this way, or $8,000 if you're 50 or older.
The income limits that block direct Roth contributions don't apply to conversions.
A single filer phased out of direct Roth contributions above $150,000 in 2024 can still use this route.
Married couples filing jointly hit the phase-out around $240,000.
If you have any money sitting in a traditional IRA, SEP IRA, or SIMPLE IRA on December 31 of the conversion year, the IRS treats all your IRA money as one pot.
That means part of your conversion becomes taxable, even if you only converted after-tax dollars.
The fix is to roll existing pre-tax IRA money into a 401(k) first, if your plan allows it.
You'll file Form 8606 with your tax return to report the nondeductible contribution and the conversion.
Skip it and you could end up paying taxes twice on the same money.
Tax software handles this, but you have to answer the questions correctly.
The IRS looks at your IRA balances as of December 31, not the date you convert.
So a rollover done in January can still affect the prior year's conversion math.
Some advisors suggest doing the conversion quickly after contributing to limit growth before the move, since any earnings converted are taxable.
For someone with 20 or 30 years until retirement, tax-free growth on $7,000 a year adds up.
A Roth also has no required minimum distributions during your lifetime, and qualified withdrawals are tax-free.
Unlike a traditional IRA, you're not forced to pull money out at 73.
One more thing: Congress has talked about closing this loophole for years, and it survived the last big tax law changes.
But rules can shift, so it's worth checking current guidance before you file.
A tax professional who has done these before is worth the fee, especially if you have any pre-tax IRA money anywhere.
The bottom line: this isn't a secret trick for the ultra-rich.
It's a standard planning tool that plenty of ordinary six-figure earners use every year.
Final Thoughts
If your income has crept past the Roth limit, it's worth a conversation before the tax year closes.