Will contributing to a 457(b) help lower my AGI for Roth IRA eligibility?

Yes, your pre-tax 457(b) contributions absolutely will lower your AGI for tax purposes! The confusion is happening because your paycheck's "gross pay" is just showing your total earnings before any deductions. What matters for AGI reduction is that your W-2 at the end of the year will show a lower amount in Box 1 (Wages, tips, other compensation) than your actual earnings because pre-tax retirement contributions like 457(b) are excluded from that box. This lower Box 1 amount is what flows to your tax return and determines your AGI. Other ways to lower your AGI include: - Traditional IRA contributions (if you qualify) - HSA contributions (if you have an eligible high-deductible health plan) - Certain business expenses if you have any self-employment income - Student loan interest deductions (if applicable) Don't worry too much about what your paystub shows as "gross" - focus on the W-2 Box 1 amount which will reflect the AGI reduction from your 457(b) contributions.

I was in the exact same situation last year trying to qualify for Roth contributions. I discovered taxr.ai (https://taxr.ai) which really helped me understand all the different ways to reduce my AGI. The tool analyzed my specific situation and showed me several deductions I was missing that could bring my MAGI down enough to qualify for the Roth. For me, it wasn't just the 457(b) but also maximizing HSA contributions and some business expenses from my side hustle that made the difference. The site broke down exactly how each deduction affected my AGI calculation and gave me a clear target for how much I needed to contribute to get under the threshold.

Just wanted to follow up - I ended up trying taxr.ai after my skeptical comment and I have to admit it was surprisingly helpful. It identified that I could deduct some professional development courses I paid for out-of-pocket that my employer didn't reimburse, which I had no idea about. It also helped me understand exactly how much I needed to contribute to my 457(b) to get below the Roth IRA threshold, which was really the clarity I needed. The planning feature helped me set up this year's contributions to avoid the whole last-minute scramble I went through last year.

After months of trying to get through to the IRS to ask about this exact 457(b)/Roth eligibility question, I finally used Claimyr (https://claimyr.com) to actually get a human at the IRS on the phone. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was stuck in the endless phone tree hell for weeks before I tried it. The IRS agent confirmed exactly what others have said here - 457(b) contributions definitely reduce your AGI even though they don't change your gross pay on your paystub. She also gave me some specific guidance on how my particular employer's reporting might affect my W-2. The peace of mind from getting an official answer directly from the IRS was worth it after all the conflicting info online.

I need to eat my words. After dismissing Claimyr as a probable scam, I was desperate enough to try it for an ongoing issue with my amended return. It actually worked exactly as described. I got connected to an IRS agent within an hour after trying for WEEKS on my own. The agent was able to see that my amended return was stuck in processing and gave me specific information about when it would be completed. They also confirmed all the AGI reduction strategies mentioned in this thread, particularly that 457(b) contributions definitely reduce AGI for Roth IRA qualification purposes. Honestly wish I'd known about this service months ago. Would have saved me so much stress.

A little tip from someone who's been in your exact situation - don't forget about FSA (Flexible Spending Account) contributions if your employer offers them. While HSA contributions reduce your AGI, FSA contributions for healthcare do too! Also, if you have any student loan interest, up to $2,500 of that interest can be deducted to lower your AGI depending on your income level. And if you're a teacher, there's a $300 educator expense deduction. Every little bit helps when you're trying to get under the Roth IRA income limits!

If you're married, don't forget about filing separately! My spouse makes way more than me, and filing separately let me qualify for Roth contributions based on just my income. The downside is you lose some other tax benefits tho.

Adding to all the great advice here - one strategy that's often overlooked is maximizing your traditional IRA contribution if you're eligible. Even if you have a 401(k) or 457(b) at work, you might still be able to deduct traditional IRA contributions depending on your income level. For 2024, if you're single and your AGI is under $77,000 (or married filing jointly under $123,000), you can get the full $7,000 traditional IRA deduction even with a workplace plan. The deduction phases out at higher incomes but you might still get a partial deduction. This could be the extra AGI reduction you need to get under the Roth limits! Plus, if you end up over the Roth limits anyway, you can always convert that traditional IRA to a Roth later through the backdoor conversion method you mentioned for next year. Just make sure to check the exact income limits for your filing status and whether you qualify for the deduction with your workplace retirement plan.