Client Teacher and Self Employed Realtor
Hello. I have a client who is a teach and a self-employed realtor. She currently contributes to a Roth 403b through her school plan. If she wanted to contribute outside the 403b, and she chose to contribute to a Traditional IRA and then convert to a Roth IRA, would the 403b be taken into consideration for the tax consequences? Could she establish a SEP IRA for herself, and max it out as well? Thanks.
Permalink Submitted by Alan - IRA critic on Mon, 2016-11-21 19:11
She may or may not deduct a TIRA contribution depending on her income or any spouse’s income. But if she could not deduct it and does not have any other non Roth IRA balance, she could made a non deductible contribution and convert it tax free to a Roth IRA. Her 403b would not affect this. She could also establish a SEP IRA, but that would be a non Roth IRA, and would make a non deductible TIRA contribution mostly taxable when she converted it. But she could make both SEP and regular IRA contributions for the same year.