How to Do a Backdoor Roth IRA at Schwab

• STEP 1: CONTRIBUTE TO SCHWAB TRADITIONAL IRA

Note: "Traditional IRA" and "Roth Contributory IRA" names are used here for the instructions. When you create each account, please rename the way you like it.

Click on "Open an Account" at the top right corner

Click "Traditional IRA" and follow the instructions to create a Traditional IRA account from Schwab. You should change the default name of the account ("Contributory") to "Traditional IRA" to easily distinguish between Traditional and Roth

When you are done, go to the Accounts and select Traditional IRA account. Click on "Transfers & Payments", then lick "Online Transfers"

If you do not have an external funding account (Checking, Saving, etc), click on the right tab "External Accounts" to set up one.

From the "Online Transfer", on the "From" dropdown, select source of account to fund the money to Traditional IRA.

On the "To" dropdown, select Traditional IRA account.

Enter $6000 in the "Cash Amount"

Select the corresponding "Contribution Year" and click "Continue" to initiate the transfer. The transfer typically takes a few days to complete.

• STEP 2: CONVERT SCHWAB TRADITIONAL IRA TO ROTH IRA

Follow step 1 to create Roth IRA

Hover your mouse to "Service" near the top middle of the page and click on "Forms"

Make sure the dropdown shows "Roth Contributory IRA" or "Traditional IRA" or whatever name you created for your Traditional/Roth IRA account. You'll see a link "Convert Traditional IRA to Roth IRA"

Click the link "Complete the Form Online"

Make sure the following is selected:

From:  "Traditional IRA" 

To: "Roth Contributory IRA" 

Conversion Type: Full Conversion

Click "Continue"

Please make sure "No, I do not want federal income tax withheld" and "No, I do not want state income tax withheld" are selected for both "Tax Withholding Election"

Click "Continue" and verify the information before submitting.

• STEP 3: CHOOSE YOUR SCHWAB ROTH IRA INVESMENTS