A tax loophole lets high earners contribute indirectly to a Roth IRA
High-income earners can’t contribute directly to a Roth IRA, but thanks to a tax loophole they can still contribute indirectly. If you qualify to take advantage of this tax loophole, you should. The government has clearly sanctioned the practice of contributing to a Roth “through the backdoor.” It would be more logical to just remove the arbitrary income limitations on Roth contributions, but that’s another discussion.
Amy Fontinelle | Investopedia