A Backdoor Roth IRA is an effective strategy for individuals who are unable to contribute directly to a Roth IRA due to income limitations.
Here in Weston and across Broward County, we see this a lot—professionals, business owners, and dual-income households whose earnings put them over the IRS thresholds for direct Roth IRA contributions, but who still want the long-term advantage of tax-free retirement growth.
Traditional IRA vs. Roth IRA: Why the Difference Matters
With a Traditional IRA, contributions may reduce your taxable income in the year of contribution. However, withdrawals during retirement are generally taxable.
On the other hand, Roth IRA contributions are made with after-tax dollars (meaning no tax benefits in the year of contribution), but qualified withdrawals including all investment growth are completely tax-free.
That tax-free growth is exactly why many Weston residents look for Roth access—especially if you’re planning ahead for retirement, future business liquidity events, or simply want more tax diversification. For broader guidance, see our tax planning services in Weston, FL.
What Is a Backdoor Roth IRA?
If you exceed the income limits for direct Roth contributions, a Backdoor Roth IRA allows you to access these tax-free benefits/growth through a permitted conversion strategy.
This is not a “loophole” in the shady sense—it’s a commonly used, IRS-recognized approach that combines:
A Traditional IRA contribution, followed by
A conversion to a Roth IRA
How the Backdoor Roth IRA Process Works
How the Process Works:
Open both a Traditional IRA and a Roth IRA account in each individual’s name with the same investment company.
Contribute to the Traditional IRA
First, make a contribution to the Traditional IRA.Convert to the Roth IRA
Then convert the funds to the Roth IRA shortly thereafter (typically the next business day).
Important note for Weston taxpayers: the tax outcome can depend heavily on whether you already have other IRA balances (Traditional/SEP/SIMPLE). That’s one of the biggest “gotchas” we help clients avoid when implementing this strategy. If you’d like a quick review, you can contact Accountit, CPA.
Contribution Limits (2025 and 2026)
Contribution limits:
Tax Year 2025 (deadline 04/15/26)
$7,000 if you’re under age 50 / $8,000 if you’re age 50 or older. Source: IRS IRA contribution limits.
Tax Year 2026
$7,500 if you’re under age 50 / $8,600 if you’re age 50 or older. Source: IRS 2026 limit update.
Weston, FL Tax Considerations You Shouldn’t Skip
When we review Backdoor Roth IRA setups for clients in Weston and the surrounding area, these are the common issues that can change the tax result:
Existing IRA balances (pro-rata rule): If you have pre-tax dollars in other IRAs, part of your conversion may become taxable. Proper reporting often involves IRS Form 8606.
Timing and small gains: If the contribution earns interest before conversion, that growth can be taxable at conversion.
Correct tax reporting: Backdoor Roth IRA transactions must be reported properly so you don’t pay tax twice or trigger IRS questions. For a general overview of how the backdoor process is typically handled, see Vanguard’s Backdoor Roth IRA guide.
Backdoor Roth IRA Help in Weston, Florida | Accountit, CPA
Please contact our office to discuss further about your eligibility, contribution limits, and tax considerations for the 2025 tax year, and to ensure this strategy is implemented correctly.
If you’re in Weston, FL (or anywhere in Broward County / South Florida) and want to make sure your Backdoor Roth IRA is handled the right way—Accountit, CPA can walk you through the steps, confirm the tax impact, and make sure it’s reported correctly. Start here: schedule a consultation. You may also want to review our individual tax preparation services in Weston, FL.
