Not eligible for qualified plan deduction
NY residents. Wife’s GI + $589k and contributes $18,000 to ER 401 K. Husband W2 GI $65k. No 401 K plan offered. Their AGI is $628,429. We can’t contribute to an Roth or Traditional IRA or 401 K plan for the husband. Any suggestions to reduce taxable income? We have a term life policy inforce and may convert to perm then, fund with after tax dollars for long term objectives. They are both 35 years of age.
Permalink Submitted by Alan - IRA critic on Thu, 2017-05-25 16:58
This will not reduce their taxable income, but the wife should check if her plan allows after tax employee contributions to the 401k. If so, she could probably contribute around 25k and do periodic direct rollovers of these contributions to her Roth IRA or Roth 401k account. This would be a much larger two step Roth contribution than Roth IRA contributions had their income permitted them.