The Money Mustache Community
Learning, Sharing, and Teaching => Taxes => Topic started by: michael on September 06, 2017, 09:28:01 PM
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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?
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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).
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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)
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Thank you both, I knew I was forgetting something :doh: