What Is a Backdoor Roth IRA?

A backdoor Roth IRA is a strategy that lets high-income earners contribute to a Roth IRA even if they're above the income limit. You contribute to a non-deductible traditional IRA, then convert it to a Roth. The conversion is taxable only if you have pre-tax money in other IRAs (due to the "pro-rata rule"). Congress hasn't eliminated this strategy, though it's been discussed. The process requires careful tracking of your basis using Form 8606.