To invoke the powers of the mega backdoor Roth IRA, first consider maxing out your other retirement savings options. This is also an option if you plan to leave your job in the near future and plan to make a rollover to a Roth IRA. Your employer's retirement plan allows for in-service distributions - a fancy term for withdrawal - of these after-tax contributions.Also optional, you can afford to make additional after-tax contributions over and above the $20,500 ($27,000 if you're 50 or older) annual 401(k) limit.Optional, but you max out your annual, nondeductible traditional IRA contributions of $6,000 ($7,000 if you're older than 50) in 2021 or 2022.You max out your employer's annual 401(k), 403(b) or 457 plan, or your solo 401(k).You earn more than $144,000 if you're single or head of household, or $214,000 if you're married filing jointly in 2022.Here's a checklist to determine if a mega backdoor Roth IRA is possible for you:

A mega backdoor Roth IRA uses the same conversion technique but could significantly lower or eliminate the tax liability on the conversion.

Therefore, a backdoor Roth IRA offers a workaround: Earners may contribute money to a nondeductible traditional IRA and then convert it to a Roth IRA. For those who are married filing jointly, the income limit is $214,000, up from $208,000 in 2021.

Contributions are also off-limits if you're filing single or head of household with an annual income of $144,000 or more in 2022, up from a $140,000 limit in 2021. High earners are prohibited from making Roth IRA contributions.

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