Solved: Can the same earned income be used to contribute to Roth 401k and Roth IRA?
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Can the same earned income be used to contribute to Roth 401k and Roth IRA?

I have an S-Corp where I am the sole owner-employee. I take the majority of my income as business income on schedule K and don't have much W2 Income. 

For simplicity sake, I have 20k in W2 income and 60k in schedule K income. 

Can I have a solo Roth 401k and max it out at 18k and then also have a Roth IRA, which I max out at 5500. Which at 23500 is more than my 20k in income.

I would think with normal pre-tax this wouldn't be possible as the 401k would reduce your earned income, but since the roth 401k wouldn't affect my W2, could I then still go and roth IRA 5500?

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Accepted Solutions
Level 15

Can the same earned income be used to contribute to Roth 401k and Roth IRA?

You are correct.  When figuring the amount that you are eligible to contribute to a Roth IRA, because Roth 401(k) contributions do not reduce the amount reported in box 1 of your W-2, the Roth 401(k) contributions do not affect the amount that you are eligible to contribute to a Roth IRA.

View solution in original post

1 Reply
Level 15

Can the same earned income be used to contribute to Roth 401k and Roth IRA?

You are correct.  When figuring the amount that you are eligible to contribute to a Roth IRA, because Roth 401(k) contributions do not reduce the amount reported in box 1 of your W-2, the Roth 401(k) contributions do not affect the amount that you are eligible to contribute to a Roth IRA.

View solution in original post

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