Nongovernmental 457b withdrawals
If deferred compensation from 457b plan distributions will appear on a w2 “income” and lifting of age for contribution for traditional IRA (SECURE Act) , can I fund a nondeductible IRA thus a Backdoor Roth throughout retirement if I have the means to do so?
Permalink Submitted by Alan - IRA critic on Tue, 2020-01-21 14:39
Box 11 of your W-2 will probably be filled with the same amount as Box 1 and you must subtract 11 from 1 to determine compensation eligible for IRA contributions. If that is the case, you will not have earned income to enable IRA contributions. However, if you did generate earned income from any source, you could make the non deductible contributions and convert them. However, if you have any other pre tax IRA balance, the conversion will be mostly taxable as calculated on Form 8606. And if you make deductible contributions after age 70.5, it will compromise your current and future ability to do an QCDs from your IRA due to a special rule included in the Secure Act. But the key is that Box 11 on your W-2.
Permalink Submitted by Brian Lee on Tue, 2020-02-11 20:24
I thought only Box 1 amount determined if an compensation eligible for IRA contribution?
Permalink Submitted by William Tuttle on Tue, 2020-02-11 20:52
The IRS treats as compensation any amount properly shown in box 1 (Wages, tips, other compensation) of Form W-2, Wage and Tax Statement, provided that amount is reduced by any amount properly shown in box 11 (Nonqualified plans).