Roth 401(k) and Roth IRA
If someone is contributing to a Roth 401(k) does that limit the amount they can put into a Roth IRA in any given tax year?
If someone is contributing to a Roth 401(k) does that limit the amount they can put into a Roth IRA in any given tax year?
Permalink Submitted by Alan Spross on Mon, 2012-04-16 17:23
Only indirectly for some taxpayers.
If Roth 401k contributions are made, modified AGI is NOT reduced by those contributions as it would be if pre tax contributions were made. The increased modified AGI could push some taxpayers over the limit to make a Roth IRA contribution. Other than this factor, there is no affect on Roth IRA contributions.
Permalink Submitted by Richard Brewer on Mon, 2012-04-16 18:26
Thanks. I did find out in the meantime that the Roth IRA and Roth 401(k) have separate and not additive limits, but I hadn’t thought about the increase in MAGI possibly making someone ineligible.