How do I figure Modified Adjusted Gross Income (MAGI)

[vi edit]

If you make over 99k as an individual or over 156k as a household, your ability to contribute to a Roth IRA goes down. This is based on your modified Adjusted Gross Income.

I'm having trouble figuring out if my 401k contributions count into that figure or not. There's all kinds of stuff about foreign income, moving costs, education, ect. But nothing that I found clearly outlines the impact of the 401k on your income as to how it relates to Roth IRA eligibility.

Ex: If I make $100,000 a year and put in $15,000 to my 401k, my taxable income is really $85,000(excluding SS & Medicare).

Is the $85,000 my MAGI, or is it still $100,000?

 

[minendo]

Modifications

To arrive at your modified AGI, start with your adjusted gross income and then add back the following items:

* Any income you excluded because of the foreign earned income exclusion.
* Any exclusion or deduction you claimed for foreign housing.
* Any interest income from series EE bonds that you were able to exclude because you paid qualified higher education expenses.
* Any deduction you claim for student loan interest or qualified tuition and related expenses.
* Any employer-paid adoption expense you excluded.
* Any deduction you claimed for a regular contribution to a traditional IRA.

Note that you are not required to add back any contribution you made to an employer plan such as a 401k plan. If you are running up against the limit for modified AGI, one way to reduce that number is to make deductible contributions to an employer plan.

http://www.fairmark.com/rothira/modagi.htm

 

[spidey07]

See if you can check out the HCE instructions from irs.gov. That might help.

AFAIK, your contributions do not count towards your AGI nor your MAGI since you are under such stipulations. This is just an opinion and quite frankly I don't really know but I know we are held to different standards than others.

 

[vi edit]

Originally posted by: minendo

Modifications

To arrive at your modified AGI, start with your adjusted gross income and then add back the following items:

* Any income you excluded because of the foreign earned income exclusion.
* Any exclusion or deduction you claimed for foreign housing.
* Any interest income from series EE bonds that you were able to exclude because you paid qualified higher education expenses.
* Any deduction you claim for student loan interest or qualified tuition and related expenses.
* Any employer-paid adoption expense you excluded.
* Any deduction you claimed for a regular contribution to a traditional IRA.

Note that you are not required to add back any contribution you made to an employer plan such as a 401k plan. If you are running up against the limit for modified AGI, one way to reduce that number is to make deductible contributions to an employer plan.

http://www.fairmark.com/rothira/modagi.htm

Thanks. Other links that I found just stopped at the "*'ed" items. I couldn't find anything that mentioned 401k contributions.

So it does look like that they lower MAGI.