2 questions about Roth IRAs

Submitted by Robert Roselli on Wed, 2023-05-24 13:34

1) Couple MFJ has an AGI of 230,000. They both increase their 401k contributions to decrease their AGI to $ 215,000. Now they are below the Roth IRA contributions. Is this allowed?
2) Couple MFJ with one spouse fully retired and the other with $ 25,000. They qualify to do $ 15,000 in deductible IRAs. Are they allowed to do a Roth conversion in the same year as they made deductible TIRA contributions?



Submitted by Alan - IRA critic on Wed, 2023-05-24 14:08

  1. Yes, this is allowed. The Roth phaseout range of MAGI for 2023 is 218k-228k.
  2. Yes. However, it would be preferable to make the contributions as regular Roth contributions and then convert 15,000 less, particularly if either spouse is under 59.5 or over 70.5.

Submitted by David Mertz on Wed, 2023-05-24 19:43

Regarding #2, keep in mind that the taxable amount of any Roth conversions will increase the couple’s MAGI for the purpose of determining deductibility of a traditional IRA contribution if the working spouse is an active participant in a workplace retirement plan.  However, Roth conversions do not raise the MAGI for the purpose of determining eligibility to make a Roth IRA contribution.

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