What's the Difference Between a Backdoor Roth IRA and a Direct Roth Contribution?

A direct Roth IRA contribution and a backdoor Roth IRA are two different ways to get money into a Roth IRA, depending on how much you earn. If your income is below the Roth IRA phase-out limits — $161,000 for single filers and $240,000 for married couples in 2024 — you can simply contribute up to $7,000 directly to a Roth IRA each year. If your income is above those limits, you're not allowed to make direct Roth contributions. The backdoor Roth is a workaround: you make a non-deductible contribution to a traditional IRA (which has no income limit) and then convert it to a Roth IRA shortly after. The conversion is generally tax-free if you have no other traditional IRA money, but it gets complicated if you have pre-tax IRA balances due to the pro-rata rule. The backdoor Roth is a widely accepted strategy that the IRS has not challenged when done properly.