topic Absorb excess Roth IRA through Traditional? 457b lower MAGI? in Retirement tax questions

Absorb excess Roth IRA through Traditional? 457b lower MAGI?

RothExcessPast — Tue, 24 Feb 2026 07:07:54 GMT

Good morning/afternoon/evening anyone who reads.
I made a mistake of contributing a total of $2,400 excess from years 2018-2021. So in 2022 I only contributed $5,700 and absorbed $300 and filled out all my 5329s with fees sent off. So now I'm at $2,100 excess I can absorb in 2023. That was my plan.

I did my math in January and all was well. I contributed $4,000 to my Roth IRA in January so I can absorb the excess. My issue is my company decided to give everyone an unexpected raise. At the rate I'm going I will be over the contribution limit for a Roth IRA.

So...I can adjust my overtime and try to squeeze in under the limit but I may not come in under the income limit.

I am curious if I can either:

A) withdraw my $4,000 from the Roth IRA, put it into a Trad IRA and then backdoor it to a Roth IRA. If I do this will I also absorb my excess $2,100 or am I only able to absorb excess into a Roth IRA?

B) put as much as I can into a Traditional 457(b) and if so will that lower my MAGI? Right now I put a very small amount into a Roth 457(b) monthly. Can I contribute to both at the same time as long as I don't put in more than $22,500 combined? It's my understanding that Trad 457(b) contributions lower my AGI, which in turn would lower my MAGI. Is that correct?

If any other suggestions please lay them on me.

Re: Absorb excess Roth IRA through Traditional? 457b lower MAGI?

fanfare — Thu, 17 Aug 2023 01:38:22 GMT

"will I also absorb my excess $2,100 "

the only way to resolve excess contributed in tax years before the current tax year is to have the custodian distribute that excess ( or offset it with a current contribution allowed but not made).

Any earnings remain in the Roth account.

Excess contributed for current tax year can be returned to you before Oct 15th if

A) you requested an extension for this tax year, OR

B) you filed a timely return before April 15 (Tax Day)

The custodian must calculate the earnings and return positive earnings.

@RothExcessPast

Re: Absorb excess Roth IRA through Traditional? 457b lower MAGI?

dmertz — Thu, 17 Aug 2023 01:36:42 GMT

A) Because the Roth IRA excess contributions are being corrected after the due dates of the respective tax returns, the correction of the excess must be accomplished with either absorption, a distribution of exactly the remaining excess amount, or a return or recharacterization of a portion of the $4,000 contribution you made for 2023. Absent getting your MAGI low enough to accommodate the entire existing excess as part of your 2023 contribution, simplest would be to just obtain a distribution of the remaining excess before the end of 2023, then in early 2024 contribute whatever you choose to contribute that still keeps you under the contribution limits. This is less prone to error than trying to do a return or recharacterization of some part of the $4,000 contribution.

B) Increasing retirement contributions to reduce your MAGI for the purpose of making a Roth IRA contribution is certainly an option. The amount that you are eligible to defer to the 457(b) for 2023 ($22,500 if under age 50) is unaffected by any other retirement contributions that you might make.