IRA contribution

[Hindhustani]

In 2023 I haven’t reached my 401k max can I contribute to traditional IRA to cover the remaining? Ours is joint combined filing, will there be any limit to contribute to IRA?

[Thokkalee]

401k is different from IRA.. both limits cannot be combined.. you can contribute upto 6500 per person to IRA before April 15th.. 

 

if you have considerable income, contributing to max out 401k and IRA is a no brainer.. that will be 29K per year.. you will save 10K in taxes (assuming you pay 30% tax rate).. this is not counting the employer contributions.. 

[beerboy17]

35 minutes ago, Thokkalee said:

401k is different from IRA.. both limits cannot be combined.. you can contribute upto 6500 per person to IRA before April 15th.. 

 

if you have considerable income, contributing to max out 401k and IRA is a no brainer.. that will be 29K per year.. you will save 10K in taxes (assuming you pay 30% tax rate).. this is not counting the employer contributions.. 

You can contribute to both a 401(k) and an IRA, up to each account's maximum annual contribution limit. However, there are income limits that prevent some employees from being eligible to deduct traditional IRA contributions if they are also covered by a 401(k) at work
 

[Discotek]

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[ilakatamaflia]

4 hours ago, Thokkalee said:

401k is different from IRA.. both limits cannot be combined.. you can contribute upto 6500 per person to IRA before April 15th.. 

 

if you have considerable income, contributing to max out 401k and IRA is a no brainer.. that will be 29K per year.. you will save 10K in taxes (assuming you pay 30% tax rate).. this is not counting the employer contributions.. 

bro, ante if i have ira - traditional and ira- roth , whats the max i can contribute is it 6500 in each accnt ?

or combined max 6500? 

[Pavanonline]

7 hours ago, ilakatamaflia said:

bro, ante if i have ira - traditional and ira- roth , whats the max i can contribute is it 6500 in each accnt ?

or combined max 6500? 

Total 6500, note that Roth is not tax deductible and also has income limits.

[Pavanonline]

9 hours ago, Discotek said:

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Source?

[Hindhustani]

28 minutes ago, Pavanonline said:

Total 6500, note that Roth is not tax deductible and also has income limits.

What is the income limit bro , is it not tax deductible? If we are with in that limit we can’t contribute?

[Discotek]

4 hours ago, Pavanonline said:

Source?

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[Pavanonline]

5 hours ago, Hindhustani said:

What is the income limit bro , is it not tax deductible? If we are with in that limit we can’t contribute?

Roth is not tax deductible, advantage of Roth is the gains are not taxable. So once you invest in Roth, you will get everything back at time of retirement. You must be within income limit to invest in Roth, there's something called backdoor roth if you exceed these limits, basically certain steps to follow to divert from your IRA to Roth.

To contribute to a Roth IRA, single tax filers must have a modified adjusted gross income (MAGI) of less than $153,000 in 2023. In 2024, the threshold rises to $161,000. If married and filing jointly, your joint MAGI must be under $228,000 in 2023. In 2024, the threshold rises to $240,000

 

[TechSri]

contribute to Traditional IRA (for 2023) before April 15 then convert immediately to Roth IRA account. It is also called back door Roth IRA which is legal. you can do $6500 max. If you and your spouse want to do samething then do in separate IRA accounts each $6500

[TechSri]

10 hours ago, Pavanonline said:

Total 6500, note that Roth is not tax deductible and also has income limits.

Back door Roth IRA does not need any income limits. 
 

contribute to Traditional IRA (for 2023) before April 15 then convert immediately to Roth IRA account. It is also called back door Roth IRA which is legal. you can do $6500 max. If you and your spouse want to do samething then do in separate IRA accounts each $6500

[Telugodura456]

23 hours ago, Hindhustani said:

In 2023 I haven’t reached my 401k max can I contribute to traditional IRA to cover the remaining? Ours is joint combined filing, will there be any limit to contribute to IRA?

if combnined agi income is greater than 228k you cannot contribute to ira

[TechSri]

48 minutes ago, Telugodura456 said:

if combnined agi income is greater than 228k you cannot contribute to ira

There are no income limitations to contribute to a non-deductible Traditional IRA, and the maximum contribution per year is $6,500 for tax year 2023 

 

non-deductible means you can not use as pre-tax deduction. Treat as after tax money and convert traditional ira to roth ira (back door roth).
 

income limit you mentioned is for Tax deduct like pre-tax to save on taxes. 

[Hindhustani]

18 minutes ago, TechSri said:

There are no income limitations to contribute to a non-deductible Traditional IRA, and the maximum contribution per year is $6,500 for tax year 2023 

 

non-deductible means you can not use as pre-tax deduction. Treat as after tax money and convert traditional ira to roth ira (back door roth).
 

income limit you mentioned is for Tax deduct like pre-tax to save on taxes. 

 Bro if my combined AGI is greater than 228 then if I use backdoor Roth then how do I get tax benefit for 2023 year. Sorry for the confusion