The Roth IRA has an income limit. Earn too much and the door closes.
Except it does not, really. There is a second entrance, it is completely legal, and Congress has known about it for years without shutting it.
It has a name that sounds like something you would whisper: the backdoor Roth.
It is not a loophole in the sneaky sense.
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It is just two ordinary, unremarkable transactions performed one after the other, and the combination produces a result the front door would not allow.
Two steps. That is genuinely all it is.
Which raises an obvious question. If it is that simple, why do so many people get it wrong?
Because there is a rule sitting underneath it that most people never hear about until their accountant calls in February with bad news.
The strategy works beautifully for some people and generates a surprise tax bill for others, and the difference has nothing to do with income.
It depends on something sitting in an account you probably have not thought about in years.
Let's do it properly.