Originally Posted by TED74

No need to talk to anyone about the back door Roth Conversion. Completely legal and ridiculous loophole in place since 2010...easy to exploit on your own. If you do your own taxes, just make sure you read and answer all IRA questions correctly when filing so you don't improperly pay extra tax or penalties.

1. Deposit money into a traditional IRA on a Monday. I have an empty account I call "non-deductible traditional IRA" to receive these finds every year.
2. Let it settle for a day or two.
3. Convert all of that money to a Roth IRA on day three.
4. Take note of any earnings you made in the 2-3 days the money say in the first account. This is the only money you still owe taxes on, since the original deposit you made to your NON DEDUCTIBLE Traditional IRA is all after-tax money.

Normally, a non-deductible traditional IRA would be non-sensical. It only makes sense in this case as a starting point to eventually get money into a ROTH...for someone or a couple who otherwise makes too much money to contribute directly to a Roth or traditional IRA.