IRA help

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Joined: Sun Apr 15, 2018 12:30 pm

IRA help

Post by sunosh » Sun Apr 15, 2018 12:51 pm

Hi Bogleheads,

We are under 50. My wife does not earn income. Our household 2017 W2 income was more than $200K but only contributed $1300 into employers 401K in 2017.

Please note that I was only employed for few months in the year and rest of the year did not earn income. So for a large part of 2017, I was not covered by employer 401K retirement plan

What are my IRA options for 2017 (we haven't filed taxes yet)?
Can I still contribute to a Traditional IRA or a Roth IRA? Will they be tax deductible in 2017 tax filing?

Thanks so much

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Joined: Mon Sep 22, 2008 12:38 pm

Re: IRA help

Post by kaneohe » Sun Apr 15, 2018 1:44 pm

Income too high for Roth or deductible TIRA. Can only contribute for non-deductible TIRA for both. Covered 1 day by retirement disqualifying as being covered whole yr.

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Joined: Thu Jan 10, 2008 12:56 pm

Re: IRA help

Post by retiredjg » Sun Apr 15, 2018 1:51 pm

Your income is too high for you to get a deduction for tIRA or to contribute to Roth IRA.

Your only choice could be making a non-deductible contribution for 2017 to tIRA and converting that to Roth IRA. This is called the "back door" and is only useful if you have no money in tIRA, rollover IRA, SEP IRA, or SIMPLE IRA. If you are interested in this, the contribution would have to be completed by the end of the day Tuesday.

The back door is easy to do and tricky to document on your taxes. Lots of people mess it up. I don't recommend doing it until you have worked through the paperwork (Form 8606) and understand it fully.

There is information in the wiki - link at the top of the page.

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Earl Lemongrab
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Re: IRA help

Post by Earl Lemongrab » Mon Apr 16, 2018 11:13 am

You wife can also contribute to a TIRA with possible backdoor Roth, through spousal contributions.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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