@ramanibala wrote:
Thanks for your reply. I am not allowed to do a direct contribution to ROTH IRA due to salary limitations. However, can I not do a contribution to non deductible IRA and convert that to ROTH IRA and claim for 2024?
I do not want to withdraw from my 401K. Thanks Ramani
Yes, that is the concept of a backdoor Roth. If you are not directly eligible for a Roth IRA contribution due to your income and participation in a workplace plan, you can contribute non-deductible funds to a traditional IRA and then convert it to a Roth.
However, for this to work, you can't have any prior deductible funds in a traditional IRA. If you do, the conversion will be pro-rated and things get more complicated.
Note that this works because IRAs and 401ks are controlled by different laws, and how much you contribute to a 401k plan does not change your eligibility to contribute non-deductible funds to a traditional IRA.
