Can contributing to a 401k reduce your MAGI enough to qualify for Roth IRA contributions?

Yes, contributing to a traditional 401k will reduce your MAGI for Roth IRA qualification purposes! This is actually a common strategy called a "backdoor Roth" workaround. When you contribute to a traditional (pre-tax) 401k, those contributions are excluded from your income before calculating your MAGI. So increasing your 401k contributions can definitely help lower your MAGI below the Roth IRA income limits. For 2025, the Roth IRA income phase-out range for single filers is $146,000-$161,000, so with your $150k income, you're right in that range where 401k contributions could make a difference. By maxing out your 401k (the limit is $23,000 for 2025 if you're under 50), you could potentially reduce your MAGI enough to fully qualify. Just remember that Roth 401k contributions don't reduce your MAGI since they're made with after-tax money. Only traditional pre-tax 401k contributions will help lower your MAGI for this purpose.

I've been using taxr.ai to figure out my own retirement contribution strategy and it was super helpful with exactly this question. I was in a similar boat last year making around $155k and wasn't sure how to optimize between my 401k and Roth IRA. I uploaded my paystubs and W-2 to https://taxr.ai and it showed me exactly how much I needed to contribute to my 401k to get under the Roth IRA income limits. What's cool is it considered all the other deductions and credits I might qualify for and gave me the exact number to aim for. Saved me from overcontributing to my 401k when I didn't need to. The best part was being able to run different scenarios to see how changing my 401k contribution would affect my tax situation overall, not just for Roth eligibility.

Just wanted to follow up - I tried taxr.ai after seeing it mentioned here. You guys were right, it was super helpful! I uploaded my last paystub and it showed me that I only needed to increase my 401k contributions by about $8,000 (not the full max) to qualify for Roth IRA. This was a game changer because I didn't want to tie up all my money in the 401k if I didn't have to. The visualization of how each additional dollar contributed affects my MAGI was really clear. I've already updated my contribution percentage with HR. Thanks for the recommendation!

If you're having trouble getting specific answers from the IRS about retirement contribution limits or MAGI calculations, I highly recommend using Claimyr to actually get through to a human at the IRS. I spent WEEKS trying to get clarification on my specific situation (I have some complex income sources). With https://claimyr.com I got connected to an IRS agent in about 15 minutes instead of waiting on hold for hours. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent was able to confirm exactly how my specific income sources affected my MAGI calculation and verify that my 401k contribution strategy would work for Roth IRA qualification. Way more helpful than trying to figure it out from generic online articles.

I feel so dumb right now. I just tried Claimyr after being super skeptical about it. After THREE YEARS of trying to get through to the IRS about a retirement plan rollover issue affecting my MAGI calculation, I finally spoke to someone who could help! Got connected in about 25 minutes (way better than my previous attempts where I'd waste half a day and still get disconnected). The agent walked me through exactly how 401k contributions affect my MAGI and confirmed that yes, I could reduce my MAGI enough to qualify for a Roth IRA by increasing my traditional 401k contributions. For anyone who's struggling with these calculations or has a unique situation, being able to actually talk to a human at the IRS is worth it. I was WRONG to be skeptical.

Don't forget that Traditional IRA contributions can also reduce your MAGI, BUT only if they're deductible. The catch is that if you're covered by a workplace retirement plan (like your 401k), the deductibility of Traditional IRA contributions phases out at much lower income levels than Roth IRA eligibility. For 2025, if you're single and covered by a workplace plan, Traditional IRA deductibility starts phasing out at $78,000 and is completely gone at $88,000. So at your $150k income, Traditional IRA contributions wouldn't be deductible and therefore wouldn't help reduce your MAGI for Roth qualification. That's why focusing on maxing out your Traditional 401k is the better strategy in your case!

Quick tip that helped me: the MAGI calculation for Roth IRA eligibility is slightly different than regular AGI. For most people they're practically the same, but there are a few adjustments. To calculate MAGI for Roth purposes, you start with your AGI (which already has your 401k contributions excluded) and then add back: - Student loan interest deduction - Tuition and fees deduction - Traditional IRA deduction (if eligible) - Foreign income exclusion - Foreign housing exclusion/deduction - Excluded savings bond interest - Excluded employer-provided adoption benefits Most people don't have many of these add-backs, which is why 401k contributions are so effective at reducing MAGI for Roth eligibility!

This is such a great strategy and something I wish I had understood earlier in my career! I'm in a similar situation making around $145k and was able to use this exact approach last year. One thing I'd add is to make sure you're calculating this based on your expected annual income, not just your current pay stub. If you get bonuses or have variable income throughout the year, that can push you over the Roth limits even if your base salary looks like it's under. I ended up using a spreadsheet to track my year-to-date income and adjust my 401k contributions quarterly to make sure I stayed on track. The key is being proactive about it rather than trying to figure it out at tax time when it's too late to make adjustments. Also worth noting - if you're close to the income limits, you might want to contribute a bit more to your 401k than the minimum needed, just as a buffer in case your income ends up higher than expected. Better to be safely under the Roth limit than to have to deal with excess contribution penalties!

This thread has been incredibly helpful! I'm in a similar boat at $148k salary and have been stressing about whether I can contribute to a Roth IRA this year. One thing I haven't seen mentioned yet is the timing aspect - if you realize late in the year that you need to increase your 401k contributions to get under the MAGI limit, there might not be enough paychecks left to make the full adjustment through payroll deductions. In that case, you might need to look into whether your employer allows "true-up" contributions or if you can make a lump sum contribution before year-end. Some employers are flexible about this, others aren't. It's worth checking with HR early in the year about their policies. Also, don't forget that if you do end up slightly over the Roth IRA income limits, you can still do a backdoor Roth conversion (contribute to non-deductible traditional IRA, then convert to Roth). It's a bit more paperwork but achieves the same goal of getting money into a Roth account. The key takeaway from all these great responses seems to be: plan early, track throughout the year, and don't be afraid to be conservative with your estimates!

This has been such an educational thread! I'm a tax preparer and see this exact scenario with clients all the time. One additional consideration I'd like to add: make sure you're factoring in state tax implications too when deciding how much to contribute to your traditional 401k. While reducing your MAGI for Roth IRA qualification is great, in some high-tax states, the immediate tax savings from 401k contributions can be substantial. In other states with no income tax, you might want to be more strategic about not over-contributing to traditional accounts if you expect to be in a higher tax bracket in retirement. Also, for those mentioning the backdoor Roth strategy as a backup - just remember that if you have ANY traditional IRA balances (even old rollover IRAs from previous jobs), the pro-rata rule applies to the entire conversion, not just the new non-deductible contribution. I've seen people accidentally create bigger tax bills thinking they could just convert the non-deductible portion. The bottom line advice from this thread is solid though: start planning early in the year, track your income monthly, and don't be afraid to adjust your contribution percentages as needed. Having multiple strategies (401k contributions, HSA if eligible, spousal IRA if applicable) gives you flexibility to optimize throughout the year.