What are the steps to open a Roth IRA if your income exceeds the limits set forth by the IRS?

ANSWER

The BIDaWIZ Team's Answer:

If your income exceeds the roth ira limits, you can contribute to a non-deductible traditional IRA and then convert it to a roth. The traditional IRA contribution should be treated as a nondeductible contribution and reported on form 8606 with your tax return. This allows you to keep track of the basis of your non-deductible IRA contributions for when you withdraw funds and since you are converting it to a Roth IRA. This treatment is supported by IRC Section 408(a). In addition, you'll need to let the custodian of your IRA know how you want your converted assets invested, whether you will pay the taxes due yourself or want the custodian to withhold the amount from the IRA's assets to pay them, and who you want to name as a beneficiary to receive the money upon your death. Please note that it makes no difference whether you open a new traditional IRA or contribute to an existing traditional IRA, the IRS views your IRAs as one big one no matter how many accounts you have.