Short answer: most practicing dentists earn too much to contribute to a Roth IRA directly, but the “backdoor Roth” is a legal, IRS-acknowledged workaround — you contribute to a traditional IRA and then convert it to Roth. It’s powerful, but one rule trips people up.
Can dentists contribute to a Roth IRA?
Directly, often no. Roth IRA contributions phase out above certain income levels, and most practicing dentists exceed them. That’s where the backdoor strategy comes in.
What is a backdoor Roth IRA?
- Contribute to a traditional (non-deductible) IRA.
- Shortly after, convert that traditional IRA to a Roth IRA.
- Because high earners get no deduction going in, the conversion is generally low- or no-tax — and the money then grows tax-free in the Roth.
What is a mega backdoor Roth?
If your practice 401(k) allows after-tax contributions and in-plan conversions, a “mega backdoor Roth” can move a much larger amount into Roth each year than the IRA version. It depends entirely on your plan’s design — a good reason to coordinate your retirement plan design with this strategy.
Should you do Roth conversions?
Roth conversions (moving pre-tax retirement money to Roth and paying tax now) can make sense in lower-income years — for example, the gap between selling a practice and starting withdrawals. Whether it’s worth it depends on your current vs. future tax rates, so it belongs in a coordinated tax plan with your CPA.
Frequently asked questions
Yes. It is a widely used strategy that the IRS has acknowledged. As with any tax strategy, it must be executed correctly and reported properly — coordinate with your CPA.
It’s an IRS rule that treats all your traditional IRA balances as one pool when you convert, so pre-tax money makes part of your conversion taxable. Holding pre-tax IRA balances can therefore create an unexpected tax bill on a backdoor Roth.
Sources
Founder & Financial Planner · Investment Adviser Representative · Series 63 & 65
Ian McGinnis is the founder of Dental Wealth Partners and a fee-only financial planner dedicated to dentists. As an investment adviser representative (Series 63 and 65), he built the firm to give dentists coordinated, fiduciary advice across their practice, taxes, investments, retirement plans, and long-term goals — the whole picture in one strategy. A graduate of Belhaven University, Ian previously worked at Davis Private Wealth, MML Investors Services, and Northwestern Mutual, and is based in the Jackson, Mississippi area. He is the author of The Wealthy Dentist and hosts the Smiles & Cents podcast.
Keep reading
- Tax planning strategies for dental practice ownersProactive, year-round tax strategies for dental practice owners — entity choice, retirement plans, income timing, and coordinating with your CPA.
- Retirement plans for dental practices, comparedA comparison of 401(k), safe harbor, profit sharing, SEP-IRA, and cash balance plans for dental practice owners — and how to choose.
- Cash balance plans for dentists, explainedHow high-income dental practice owners can use a cash balance plan to shelter more than a 401(k) allows — and how to tell whether it fits.