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aqhorsea
New Member

401k pretax limit is 18,500. Some plans allow additional after tax money after reaching the pretax limit. Does the after tax portion reduces ones AGI?

 
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dmertz
Level 15

401k pretax limit is 18,500. Some plans allow additional after tax money after reaching the pretax limit. Does the after tax portion reduces ones AGI?

No, an after-tax contribution does not reduce your AGI.  Being included in your AGI is what makes it an after-tax contribution.

When you eventually make distributions from the plan, the portion of each distribution that is after-tax basis does not add to your AGI for the year of the distribution.

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dmertz
Level 15

401k pretax limit is 18,500. Some plans allow additional after tax money after reaching the pretax limit. Does the after tax portion reduces ones AGI?

No, an after-tax contribution does not reduce your AGI.  Being included in your AGI is what makes it an after-tax contribution.

When you eventually make distributions from the plan, the portion of each distribution that is after-tax basis does not add to your AGI for the year of the distribution.

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