Roth 401k and Roth IRA contribution

Submitted by Howard Hook on Thu, 2022-03-03 01:40

Taxpayer, age 25 has W-2 wages of $6,000 elects to contribute 100% to his employer Roth 401k at work. Can they also contribute $6,000 to a Roth IRA ?
No other taxable income on tax return so taxpayer is under the AGI limits for Roth contributions.

Thanks
Howard



Submitted by David Mertz on Thu, 2022-03-03 02:11

Due to the way the law is written, yes, the same $6,000 that was contributed to the Roth 401(k) can be used to support a Roth IRA contribution.  The amount shown in box 1 (minus an amount in box 11) of the W-2 is compensation that will support an IRA contribution.  Only deductible contributions (traditional 401(k) elective deferrals) reduce the amount in box 1 of the W-2 and reduce the amount available to contribute to an IRA.

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