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New Member
posted Jun 4, 2019 10:49:23 PM

Do Roth 401(k) contributions count as taxable compensation for Roth IRA?

If I made $10k this year and put all of it into a Roth 401k at my work, would this income still count as "taxable compensation" for the purposes of the Roth IRA minimum taxable compensation requirement (I would use my spouse's income to fund my IRA)?

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1 Best answer
Level 15
Jun 4, 2019 10:49:26 PM

Your Roth 401(k) contributions do not reduce the amount in box 1 of your W-2 which is compensation on which you can base a Roth IRA contribution.  Even if you contribute all $10K of your pay to the Roth 401(k), you can still use the same $10K to support contributions to a Roth IRA.

7 Replies
Level 15
Jun 4, 2019 10:49:25 PM

Contributions to a ROTH IRA or ROTH 401(k) are taxable. Period.
You can't use your spouse's income to fund your regular IRA. You can only use "your" earned income to fund "your" retirement account, be it traditional or ROTH. But you can use your wife's income to pay your taxes on your ROTH contributions.

Level 15
Jun 4, 2019 10:49:26 PM

Your Roth 401(k) contributions do not reduce the amount in box 1 of your W-2 which is compensation on which you can base a Roth IRA contribution.  Even if you contribute all $10K of your pay to the Roth 401(k), you can still use the same $10K to support contributions to a Roth IRA.

Level 15
Jun 4, 2019 10:49:27 PM

In addition, if you are filing a joint return then the total taxable compensation is the total of both spouses compensation that can fund an IRA for either or both spouses (subject to certain spousal IRA rules).

Level 15
Jun 4, 2019 10:49:28 PM

Hey! Didn't know that? I like it! Wonder if I can cancel out what may be an over contribution to my own ROTH this year.

Level 15
Jun 4, 2019 10:49:29 PM

@Carl - You did not know which - what I posted or what dmertz posted?

Level 15
Jun 4, 2019 10:49:30 PM

Using  one spouse's earned income to make a contribution  for the other spouse's IRA is called doing a spousal contribution ... this is how a non working spouse can contribute to an IRA ... rule has been on the books for as long as IRAs have been.

Level 15
Jun 4, 2019 10:49:31 PM

Kay Bailey Hutchison Spousal IRA Limit

For 2017, if you file a joint return and your taxable compensation is less than that of your spouse, the most that can be contributed for the year to your IRA is the smaller of the following two amounts.

 1)   $5,500 ($6,500 if you are age 50 or older).

  2)  The total compensation includible in the gross income of both you and your spouse for the year, reduced by the following two amounts.

     a)   Your spouse's IRA contribution for the year to a traditional IRA.

      b)  Any contributions for the year to a Roth IRA on behalf of your spouse.

This means that the total combined contributions that can be made for the year to your IRA and your spouse's IRA can be as much as $11,000 ($12,000 if only one of you is age 50 or older, or $13,000 if both of you are age 50 or older).

<a rel="nofollow" target="_blank" href="https://www.irs.gov/publications/p590a#en_US_2017_publink1000230412">https://www.irs.gov/publications/p590a#en_US_2017_publink1000230412</a>

[says 2017 but that is the latest publication - 2018 pub not issued yet]