Hi there,
I currently am not eligible for a Roth IRA because my income is too high ($130k/year). I also have taxable interest that increased my taxable income to $145k last year.
So this year, I'm trying to fudge things to become eligible for a Roth, because I also contribute to a 401(k) at work, and therefore I don't qualify for tax-deductible T-IRA contributions. By mid-July I will have contributed the limit to the 401(k) - $17500 - which brings my estimated taxable income down (AGI) to $127500.
My employer currently pays for a low-deductible ($500) health insurance plan, but if I drop that and enroll in a $95/month HDHP, I qualify for a HSA - then I can contribute $3250 to the HSA, which brings my estimated AGI to $124250 - enough to barely qualify for a Roth. So it would cost me $1140/year to be in the HDHP, and I would theoretically save $910/yr in taxes (in the 28% California bracket) off that pre-tax $3250, so I would lose some in order to invest but I am assuming ROI in the HSA will compensate.
Under this scenario, I could contribute about $1000/year to a Roth (from the calculations
here).
If my investments do better this year, this may all be moot as I doubt I could get my AGI down much further.
The other scenario I am thinking of is contributing to a T-IRA and doing the "backdoor" Roth conversion, but would this actually save me anything, since the contributions arent deductible?
Is this crazy? Is there a better way or is it even worth it?