Author Topic: Roth 457 question  (Read 1249 times)

Gone Fishing

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Roth 457 question
« on: November 17, 2016, 03:26:31 PM »
My wife just gained access to a 457 plan with a Roth option from her part time gig.  Seeing as we don't pay any federal income taxes since I FIRED, I was planning on contributing the majority of her income to the plan.  I would also like to continue to fund our Roth IRAs up to the total of her earned income by selling taxable investments and repurchasing inside our Roths.  In effect, our total Roth contributions (IRA + 457) will exceed her earned income.  Are there any problems with this?

seattlecyclone

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Re: Roth 457 question
« Reply #1 on: November 17, 2016, 03:31:09 PM »
I think this is legit. I've read over the Roth IRA publications and none of them say that you have to reduce your "compensation" for Roth IRA purposes by the amount that you contributed to workplace Roth accounts.


terran

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Re: Roth 457 question
« Reply #3 on: November 17, 2016, 05:32:06 PM »
Won't box 1 of the w2 have to show earned income to make the IRA contributions, but the 457 will reduce this? I think you might be stuck contributing an amount equal to her income. I could be wrong though.

seattlecyclone

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Re: Roth 457 question
« Reply #4 on: November 17, 2016, 06:30:47 PM »
Roth contributions don't reduce box 1 of the W-2.