Defined Benefit plan and IRA contribution
I have a S corporation who makes contributions to a defined benefit plan for the shareholder. Can the shareholder also make contributions to an Traditional IRA or to a Roth IRA??
I have a S corporation who makes contributions to a defined benefit plan for the shareholder. Can the shareholder also make contributions to an Traditional IRA or to a Roth IRA??
Permalink Submitted by William Tuttle on Mon, 2022-02-07 19:06
The 2% shareholder-employee is an active participant in an employer retirement plan. They can make a traditional IRA contribution, but will subject to the traditional IRA deduction income limit. If you have enough income to justify a DB plan, you almost certainly exceed those limits
Likewise, you likely exceed the Roth IRA income limits.
However, if you do not have any pre-tax balances in all traditional, SEP and SIMPLE IRA accounts. You could execute a tax efficient Backdoor Roth process.