Roth IRA Eligibility

[LearningMustachian72]

I think I missed the boat on Roth IRA contributions but wanted to confirm.

My wife and I make roughly $228k/year (170k and 58k). We file separately for other reasons. It looks like the income limits are very strict for married filing separately filers but even if we did file jointly, we still could not contribute to Roth IRA, correct?  Therefore is our only IRA option going forward traditional?

We max out 3 tax advantaged accounts already (401k, 403b and 457) and are looking to increase our savings beyond these.

Thank you in advance!

[reeshau]

This would be a case for a back-door Roth.  Make a contribution to a traditional IRA (pre-tax or not) and immediately roll it over to a Roth.  Voila!

Note that doing this you will lose the tax deduction benefit of your traditional contributions.  You probably wouldn't qualify for pre-tax anyway, so make an after tax, traditional contribution.  Your wife may qualify, but the rollover will make it taxable, anyway, so the two will negate each other.

Do the rollover as soon as you can; any gains you make on the traditional IRA will be taxable income on rollover.

[boarder42]

https://www.physicianonfire.com/backdoor/

[seattlecyclone]

Do the rollover as soon as you can; any gains you make on the traditional IRA will be taxable income on rollover.

Also there's a fair chance Congress gets rid of after-tax Roth conversions after the end of 2021. It's therefore possible that if you wait until after January 1 to make your non-deductible contribution for 2021 you'd be unable to do the conversion step. Get both steps of the transaction done by the end of this year if you want to do it.