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Learning, Sharing, and Teaching => Taxes => Topic started by: michael on September 06, 2017, 09:28:01 PM

Title: Backdoor contribution limit
Post by: michael on September 06, 2017, 09:28:01 PM
Say you have contributed $18k to your 401k, then $5500 to your Roth IRA.  Supposedly you can contribute more to the Roth by doing a non-deductible traditional IRA contribution, then roll it over ("convert") to your Roth IRA.

Is there a limit on the amount you can contribute to the non-deductible traditional and then convert?  Can someone provide an IRS link for confirmation?
Title: Re: Backdoor contribution limit
Post by: terran on September 06, 2017, 10:03:03 PM
Nope, the limit across all IRAs is $5500, so if you've already contributed $5500 that's it. The backdoor roth is useful for people to make too much to be eligible for a direct roth contribution. They can still put in at most $5500 though.

There is something called a mega backdoor roth which is something else. It requires an employer plan set up in a very specific way (to allow both aftertax contributions and in service withdrawals or rollovers while still working).
Title: Re: Backdoor contribution limit
Post by: MDM on September 07, 2017, 12:20:22 AM
Can someone provide an IRS link for confirmation?

Retirement Topics IRA Contribution Limits | Internal Revenue Service (https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits)
Title: Re: Backdoor contribution limit
Post by: michael on September 07, 2017, 08:26:49 AM
Thank you both, I knew I was forgetting something :doh: