Originally Posted by
PurpleToolBox
Can someone explain how to fund a Roth by the "back door" approach?
Backdoor Roth IRA - Bogleheads
Talk to an investment guy but my understanding is:
the easiest way to think of it is you take IRA contributions that you have already paid taxes on and convert them. The catch is if you have tax deferred IRA money you have to convert some of that too.
Pretend you do not have a traditional IRA because you make too much money to get the tax deferral. You open a traditional IRA with already taxed income and then you can convert 100% to a Roth.
If you already have 10k in an IRA that has been tax deferred and you add another 10k of taxed money to it than you can convert it but you will pay income tax on 50% of anything you convert.