Roth IRA Limits
I have earned compensation of approx. $ 10,000. Of this I have deferred in the state 457 plan $ 7,000. Thus my earned wages on my W-2 show only $ 3,000. Can I deposit $ 5,000 to a Roth IRA?
Zimmer
I have earned compensation of approx. $ 10,000. Of this I have deferred in the state 457 plan $ 7,000. Thus my earned wages on my W-2 show only $ 3,000. Can I deposit $ 5,000 to a Roth IRA?
Zimmer
Permalink Submitted by Alan Spross on Thu, 2011-03-31 19:06
No, just 3,000.
But if your contributions were to the newly authorized Roth 457b account (if offered), then your W-2 Box 1 would show 10,000 instead of 3,000. You would then be able to make your full Roth IRA contribution as long as your total MAGI was not too high. Seems strange because you are effectively using the same salary dollars to defer to a Roth 457b but these dollars are taxable compensation on your W-2 so you can also use them to qualify for a Roth IRA contribution.
If the plan offers it, you could split your contribution so that only 2,000 goes to the Roth option. That will give you 5,000 in Box 1 of your W-2 and enough for full Roth IRA contribution. Add another 1,000 if you are age 50 for catch up Roth IRA contribution.