Hoping someone can answer this for me. I spent ~2-3 hours last night reading IRS pubs, letter and various websites but couldn’t seem to find the definitive answer. . . or maybe I did and just didn't understand it.
I’m a 56 year old, retired physician and have a part-time, self-employed job (S Corp) performing inspections. I make ~$50k per year. It keeps me busy, social and I only have to tap ~$30-40k/year from my non-qualified savings to live. The Mega Back Door option seemed like a great way for me to convert some of my non-qualified savings to a ROTH account. In fact, that is the only reason I’m thinking about doing this! I’m just about ready to pull the trigger on setting up a Mega Back Door system. I’ll use Etrade for the custodial account. Ascensus for the plan doc (only IRS approved i401k doc wit after-tax contribs allowed I could find).
Here is my question: are after-tax contributions included in Section 415 limits? For example, if my W2 compensation is $42000, can I still place $54k into the account? Am I limited to $42000 (my W2 income)? How about the $6000 catch-up contribution? It seems to me that is NOT subject to income limitations . . . but, then again, what do I know?!?
Thanks, hope someone knows the answer.
I’m a 56 year old, retired physician and have a part-time, self-employed job (S Corp) performing inspections. I make ~$50k per year. It keeps me busy, social and I only have to tap ~$30-40k/year from my non-qualified savings to live. The Mega Back Door option seemed like a great way for me to convert some of my non-qualified savings to a ROTH account. In fact, that is the only reason I’m thinking about doing this! I’m just about ready to pull the trigger on setting up a Mega Back Door system. I’ll use Etrade for the custodial account. Ascensus for the plan doc (only IRS approved i401k doc wit after-tax contribs allowed I could find).
Here is my question: are after-tax contributions included in Section 415 limits? For example, if my W2 compensation is $42000, can I still place $54k into the account? Am I limited to $42000 (my W2 income)? How about the $6000 catch-up contribution? It seems to me that is NOT subject to income limitations . . . but, then again, what do I know?!?
Thanks, hope someone knows the answer.
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