Question

A back door Roth IRA is ...

Group of answer choices

A. no longer an option in 2020 as the loophole that allowed it has been changed.

B. a way fro someone to do a Roth conversion if their income exceeds the limits for Roth IRA conversions.

C. a way to take advantage of a loop hole in the rules such that someone can make a contribution to a ROTH IRA and still take a deduction for the contribution,

D. a way for someone who exceeds the contribution limits for Roth IRA's to still make an IRA contribution via a traditional IRA contribution and conversion to a Roth

Answer 1

Answer-

The correct option is D. a way for someone who exceeds the contribution limits for Roth IRA's to still make an IRA contribution via a traditional IRA contribution and conversion to a Roth.

An individual can contribute money to an existing traditional IRA and then roll over the funds to a Roth IRA account or one can roll over existing traditional IRA money into a Roth as much as one wants at one time, even if it exceeds the annual contribution amount.

The options A,B and C are incorrect.

Option A is incorrect as it exists in 2020.

Option B not a way for someone to do a Roth conversion if their income exceeds the limits for Roth IRA conversions.

Option C Its not a loophole such that someone can make a contribution to a ROTH IRA and still take a deduction for the contribution,