Simple Plan Participation and IRA contribution
Client is an active participant in her SIMPLE PLAN ( FYI , she is the owner of the company).
She is not maxing out the Simple. Can she also fund a deductible IRA or a ROTH IRA and contribute $7,000 since she is over age 50? She is not thrilled with the Simple PLan’s investment options and so wants to contribute to her IRA or ROTH.
Thank you
Permalink Submitted by Alan - IRA critic on Tue, 2021-04-06 18:15
She can contribute to either a TIRA or Roth IRA using her earned income. However, being an active participant in the SIMPLE IRA means that MAGI may be too high to deduct the TIRA contribution. Roth MAGI limits are higher than those to deduct a TIRA contribution, so if not able to take the TIRA deduction, client may still qualify for a Roth contribution.