Eliminating Roth Income Restrictions

Taxpayers whose income exceeds certain threshold amounts are prohibited from contributing directly to a Roth IRA (taxpayers with income above $165,000 (single filers) or $246,000 (joint returns) are completely prohibited from directly funding a Roth account in 2025). While those taxpayers cannot directly fund a Roth IRA, they are entitled to use a “backdoor” strategy where they fund a traditional IRA and convert those funds to a Roth (paying income tax at the time of conversion). When Congress passed the 2017 tax reform legislation, they “blessed” this backdoor in their committed report related to the legislation. Now, proposals have been floated to eliminate the income restrictions on direct Roth IRA funding.

We asked two professors and authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about whether the income restrictions on Roth IRA contributions should be eliminated.

Below is a summary of the debate that ensued between the two professors.