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From Melinda May, CPA | Featherstone
A Fredericksburg Today Partner

Trusted advice

Behind the back door

  • Suppose a taxpayer with $26,000 of pretax money in a traditional IRA makes a $6,500 nondeductible contribution to a new traditional IRA.
  • That brings the IRA total to $32,500, of which $6,500 (20 percent) is after-tax money.
  • Then, a Roth IRA conversion of any amount will be 20 percent tax-free and 80 percent taxable, regardless of which IRA is used for the Roth conversion.
  • Such back-door Roth conversions may be most appealing to high income taxpayers with little or no pretax money in traditional, SEP, or SIMPLE IRAs.


Featherstone LLC provides Tax Planning & Preparation, Accounting and CFO Consulting. Please contact the company by email at info@featherstonecpa.com or by calling 540-227-4321.

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