A Roth conversion and a “backdoor” Roth are similar, but not quite the same.
A Roth conversion is a rollover of assets from a traditional IRA or a qualified retirement plan, such as a 401(k), into a Roth IRA. You will owe income tax on the amount converted in the year of the switch. If you’re under 59½, the early distribution penalty is waived. Future earnings distributions from the Roth IRA will be tax-free if certain conditions are met.
A "backdoor Roth IRA" is a conversion strategy that enables individuals with high incomes to contribute to a Roth IRA, bypassing IRS income limits. Essentially, it involves placing post-tax funds into a traditional IRA and subsequently converting those funds into a Roth IRA. This approach allows anyone to access the benefits of a Roth IRA, regardless of their income eligibility.
If you’re unsure if this strategy is right for you, contact a tax professional or advisor.