As we all know, Roth IRAs have income limits that prohibit individuals from contributing to a Roth IRA if their Modified Adjusted Gross Income is over a certain limit ($133,000 for individual contributors, and $196,000 for a married couple filing jointly in 2017).

It is my understanding that one way around this restriction is to use a Backdoor Roth IRA, where a traditional IRA can be converted into a Roth IRA. Any pre-tax income that has been placed into a traditional IRA is taxed when it is converted into a Roth IRA, and any post-tax income is not.

My question is: doesn't this allow people to get around the MAGI income limit restriction on a Roth IRA? If someone can just convert their Traditional IRA to a Roth IRA with no penalty (other than the tax they would have had to pay to contribute to the Roth IRA in the first place which isn't really a penalty), doesn't it mean that the limits on Roth IRAs are basically irrelevant or easily avoided?

  • 4
    It wasn't intended that way, that's why it's called backdoor conversion
    – Aganju
    Jun 16, 2017 at 19:57
  • 1
    Note that not everyone can take advantage of backdoor Roth IRA contributions. If one has existing pre-tax money in Traditional IRA or other pre-tax IRAs, the pro-rata rule means that any conversion to Roth IRA will have to convert both pre-tax money and post-tax money, leading to taxes on the conversion of pre-tax money, and leaving some post-tax money behind in the pre-tax IRA (unless all the money is converted), which makes it no longer the same as a direct Roth IRA contribution.
    – user102008
    Jun 17, 2017 at 4:57

1 Answer 1


There used to be income limits on Roth conversions. They were eliminated in 2010 by the Tax Increase Prevention and Reconciliation Act of 2005, probably to increase tax revenue. This combined with the lack of income limits on non-deductible Traditional IRAs opened up the backdoor Roth IRA. We don't know if politicians intended this, but closing it now would be disadvantageous to upper-middle class taxpayers, and as such is not straightforward to accomplish politically. It's obviously not an ideal situation for those who would like a clear yes or no as to whether they can make a Roth IRA contribution, but it's a consequence of the current state of U.S. politics.

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