- Contributions to IRAs and Roth IRAs are aggregated. This means that you cannot contribute $6,000 to each type (i.e., traditional and Roth IRA); however, you can contribute some to each up to the $6,000 combined limit. If you are aged 50 or older in 2020, your IRA contribution increases to $7,000.
- TRADITIONAL IRA CONTRIBUTIONS: While the IRS rules allow for contributions to both Solo 401k plans and IRAs, if you are also participating in a solo 401k plan, you can still make the traditional IRA contributions but they may not be tax deductible. See the chart listed on the following IRS link for these limits: https://www.irs.gov/retirement-plans/plan-participant-employee/2020-ira-contribution-and-deduction-limits-effect-of-modified-agi-on-deductible-contributions-if-you-are-covered-by-a-retirement-plan-at-work
2020 IRA Limits- Effect of Modified AGI on Deduction if You are Covered by a Retirement Plan at Work, or if You Contribute to a Solo 401k Plan
If you are covered by a retirement plan at work or contribute to a self-employed solo 401k plan, use this table to determine if your modified AGI affects the amount of your deduction. See IRAs for more information.
| If Your Filing Status Is… | And Your Modified AGI Is… | Then You Can Take… |
|---|---|---|
| single or head of household |
$65,000 or less | a full deduction up to the amount of your contribution limit. |
| more than $65,000 but less than $75,000 | a partial deduction. | |
| $75,000 or more | no deduction. | |
| married filing jointly or qualifying widow(er) | $104,000 or less | a full deduction up to the amount of your contribution limit. |
| more than $104,000 but less than $124,000 | a partial deduction. | |
| $124,000 or more | no deduction. | |
| married filing separately | less than $10,000 | a partial deduction. |
| $10,000 or more | no deduction. | |
| If you file separately and did not live with your spouse at any time during the year, your IRA deduction is determined under the “Single” filing status. | ||
ROTH IRA CONTRIBUTIONS: While you can also contribute to a Roth IRA and a solo 401k plan, not everybody qualifies for making a Roth IRA contribution if their modified AGI is over a certain limit. For these limits, please see the following chart. https://www.irs.gov/retirement-plans/plan-participant-employee/amount-of-roth-ira-contributions-that-you-can-make-for-2020
Amount of Roth IRA Contributions That You Can Make for 2020
This table shows whether your contribution to a Roth IRA is affected by the amount of your modified AGI as computed for Roth IRA purpose.
| If your filing status is… | And your modified AGI is… | Then you can contribute… |
| married filing jointly or qualifying widow(er) |
< $196,000 |
up to the limit |
|
> $196,000 but < $206,000 |
a reduced amount | |
|
> $206,000 |
zero | |
| married filing separately and you lived with your spouse at any time during the year |
< $10,000 |
a reduced amount |
|
> $10,000 |
zero | |
| single, head of household, or married filing separately and you did not live with your spouse at any time during the year |
< $124,000 |
up to the limit |
|
> $124,000 but < $139,000 |
a reduced amount | |
|
> $139,000 |
zero |
2 Comments
Hi!
If I have a Solo 401K and elect to include a Roth provision with my 401K, can I still contribute to a Roth IRA assuming my AGI is below the threshold?
Are contribution limits to ROTH IRA and SOLO 401K ROTH combined? or can i contribute separately $7000 and up to $26,000 to each (I am 62 years old and my AGI IS AROUND $24,000). I discovered this type of accounts recently.
Thank you 🙂