Overall Retirement Plan Contribution Limit

[Gretel]

I thought to find a clear answer in writing easily but I am close to despair now. It kind of spells it out on top of the chart for pension plan limitations but not clear enough for my client. Where can I find this? Specifically, can a contribution to a Roth IRA be made if a 401 k plan is already maxed at $57,000 for a self-employed individual?

[Gretel]

I thought to find a clear answer in writing easily but I am close to despair now. It kind of spells it out on top of the chart for pension plan limitations but not clear enough for my client. Where can I find this? Specifically, can a contribution to a Roth IRA be made if a 401 k plan is already maxed at $57,000 for a self-employed individual?

I am picking up this thread after receiving a response from NATP that I wanted to share. It is allowed to make a contribution to an IRA/Roth IRA after maxing the employer/employee retirement plan contribution of $57,000.

[New York Enrolled Agent]

I am picking up this thread after receiving a response from NATP that I wanted to share. It is allowed to make a contribution to an IRA/Roth IRA after maxing the employer/employee retirement plan contribution of $57,000.

Conceptually you can fund a Roth IRA and still have a different retirement plan. But isn't there a $$$ figure at which you can't fund a Roth if you have a retirement plan? What type of retirement plan? A $57K contribution would typically indicate a high income.

[Rapid Robert]

The only connection between an employer plan and a Roth IRA is that you can't double count the same earned income for both purposes. After reducing earned income by the contribution to the 401k plan, if there is still enough earned income left and other qualifications are met (such as the AGI threshold alluded to), they can contribute.

From TheTaxBook:

Compensation for IRA Contribution Purposes

For purposes of contributing to an IRA, compensation is earnings from work, whether as an employee or self-employed. Compensation includes the following types of income.

• Wages, salaries, tips, professional fees, bonuses, commissions, military differential pay, and any other taxable amounts included in box 1, Form W-2 , (e.g., scholarships, fellowships, and stipends).
• Net earnings from self-employment as a sole proprietor or a partner of a partnership, reduced by the deduction for one-half of self-employment (SE) tax and any deductions for contributions to a qualified retirement plan.

[Gretel]

Conceptually you can fund a Roth IRA and still have a different retirement plan. But isn't there a $$$ figure at which you can't fund a Roth if you have a retirement plan? What type of retirement plan? A $57K contribution would typically indicate a high income.

Solo 401(k), yes, high income but below Roth income limits.