{ "media_type": "text", "post_content": "If I recently got a raise above 125k, how soon do the Roth IRA income limits apply? Is it after I submit a tax return of above 125k MAGI?", "post_id": "6106cd24e0a8090024792ae6", "reply_count": 13, "vote_count": 1, "bowl_id": "59064a3cb12379001006592c", "bowl_name": "Personal Investment Chatter" }

If I recently got a raise above 125k, how soon do the Roth IRA income limits apply? Is it after I submit a tax return of above 125k MAGI?

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It is based on your calendar year. If you make less than the limit for 2021 you are fine. If you are over the lint for 2021 you can’t contribute to Roth but could do backdoor if you have no traditional IRA

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From the amount earned you have to deduct deductions but also include investment gains, interest earned etc. So income alone wont tell you whether you are above or under threshold

Also if you max out your 401K, you can subtract that $19,500 from your income to hopefully be under the limit

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Just contribute to a traditional Ira and then do a conversion. Save your self the headache of trying to figure out how much you can directly contribute

^ this. It's a little more work, but not complicated once you go through the backdoor process once. (And you'll likely have to do this many years to come anyway). Definitely less of a headache to just do the backdoor if you're close to the limit or phase out and won't know for sure until you file taxes the following year. However, really important to understand the rules and process if you make enough money for this to be a consideration. Also, most companies like Vanguard, Fidelity will be more than happy to walk you through the online process.

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