[aidenn0]

I mean a few years back I was told by my accountant that I made too much money to contribute to a Roth IRA, but it was 100% kosher to open a traditional IRA and immediately convert it to a Roth IRA. The fact that this was legal also baffles me.

[c22]

When you convert your traditional IRA to a Roth you immediately owe taxes on the amount. Then, presumably, due to your income, you can no longer contribute to it. Makes sense to me.

[aidenn0]

It was a while ago, but IIRC you only owe taxes on the pre-tax contributions (which, in this case was $0). But I couldn't make a post-tax contribution directly to a Roth, just a post-tax contribution to a traditional, then convert...

[edit]

Some googling[1] implies my memory was mostly correct.

1: https://www.investopedia.com/roth-ira-conversion-rules-47704... See particularly the part about "backdoor

[adrianmonk]

The point is that there are income limits for this process:

1. Take N dollars of post-tax money.

2. Put it in a Roth IRA.

But the same limits don't apply to this process:

1. Take N dollars of post-tax money.

2. Put it in a traditional IRA.

3. The next day, convert the traditional IRA to a Roth IRA.

When you do the conversion, you only owe taxes on any additional earnings (not your post-tax contribution) during the one day that it was a traditional IRA. So the second procedure accomplishes almost exactly the same thing as the first one, but it legally gets around the limit designed to prevent rich people from getting Roth IRA tax breaks.