How do ultra-wealthy investors use Roth IRAs to bypass taxes despite contribution limits?

3 Wait, so they're buying shares of their own companies? Isn't that sketchy from a tax perspective? Like couldn't I just create a company, value it super low, buy shares in my Roth, then suddenly "discover" the company is worth millions?

8 Yes, they often buy shares of companies they're personally involved with, which is where it gets controversial but not necessarily illegal. The IRS does look at these transactions, especially if the valuations seem artificially low. The reason everyone can't just do this is that you need a legitimate business with real potential and proper documentation for the valuation. Simply creating a shell company and arbitrarily changing its value would likely trigger an audit. These wealthy individuals typically use qualified independent valuations and follow proper procedures, making it difficult for the IRS to challenge them even when the outcomes seem unfair.

5 Does it actually provide specific investment recommendations? I've tried a couple of these "AI" financial tools and they just spit out generic advice I could find anywhere.

17 I'm skeptical. How exactly would this help with Roth strategies? Most of these ultra-wealthy techniques require connections to pre-IPO companies and specialized knowledge of tax loopholes. Can your tool really help average investors?

14 It doesn't make specific stock recommendations like "buy XYZ company" - instead it analyzes your overall tax situation to identify opportunities for tax efficiency. For example, it showed me how to better position my different investment types across my accounts to minimize tax drag. Regarding ultra-wealthy strategies, while it won't give you access to pre-IPO deals, it does explain legitimate techniques that scale down to regular investors. For instance, it helped me understand how to properly value small business interests for potential Roth conversions and identified specific IRS guidelines that apply to my situation. It's definitely more detailed than the generic "max out your contributions" advice.

19 How does that even work? The IRS phone system is a nightmare. Are you saying this service somehow jumps the queue or just calls for you?

17 This sounds too good to be true. The IRS is chronically understaffed with hours-long wait times. I find it hard to believe any service could magically get you through faster than everyone else trying to call.

12 It doesn't jump the queue - that would be impossible. It basically uses technology to navigate the phone system and wait on hold for you. When an agent finally picks up, you get a call back so you don't have to sit there listening to hold music for hours. The service literally just waits in line for you. Nothing magical about it - it's just saving you from having to personally sit through the wait time. They can't make the IRS answer faster, but they can take the pain of waiting out of the equation.

11 Is that different from the mega backdoor Roth? I've heard about that one but don't fully understand it. Something about using your 401k?

22 Yes, they're different strategies. The regular backdoor Roth is what I described - contributing to a traditional IRA then converting to Roth when your income exceeds the limits for direct Roth contributions. The mega backdoor Roth involves making after-tax (not Roth) contributions to a 401(k) plan above the standard employee contribution limit, then either converting those to Roth inside the plan or rolling them over to a Roth IRA. It requires a 401(k) plan that specifically allows after-tax contributions and in-service distributions or rollovers. The potential contribution amounts are much larger - potentially up to $40,000+ per year depending on your plan's limits and your other contributions.

16 Are there companies that help set up self-directed IRAs? My regular brokerage only lets me invest in standard stuff like stocks and ETFs.