I have been contributing to a Roth IRA through the “normal” backdoor method for years, but just recently learned about the “Mega Backdoor” and that my company 401K allows the necessary transfers. I know there is a limit of $56,000 for total employee plus employer contributions to 401K and a $19,000 limit for tax deductions, so the Mega Backdoor approach would allow you to transfer $37,000 a year to a Roth IRA. In my case, I have already contributed $6,000 to a traditional IRA and rolled that into a Roth.
My question is - can I contribute the full $56,000 to the 401K even though I contributed $6,000 to an IRA (effectively allowing me to contribute $43,000 to the IRA in the year), or does the $56,000 cap apply to the sum of 401K and IRA contributions? I’ve looked up several articles on this approach and don’t see anything that answers this question.
Submitted November 13, 2019 at 09:01PM by PhillyFrank76 https://ift.tt/370nSeC
