The employer contribution will be a deduction, whether it goes to Roth or pre-tax, and then taxable to the employee. Is there a prohibition for single owners to contribute to the Roth for pass through entity - essentially giving a net zero effect on taxes for the contribution?
Related to this topic is the relatively unknown maximum that an employee can contribute to his or her SIMPLE IRA (whether or not treated as a Roth) if the employer has less than 25 employees. Automatically the $16,000/$19,500 limits can be increased by 10% for 2024. I have asked multiple financial advisors and CPA colleagues and they were not familiar with this SECURE 2.0 provision. (I wasn't aware until last week, after reading an article...in fact I increased my own SIMPLE contribution!)
Yes, this was in SECURE 2.0. I know I covered it previously in my SECURE 2.0 classes and 2023 update. There were lots of small and large changes in that legislation.
The employer contribution will be a deduction, whether it goes to Roth or pre-tax, and then taxable to the employee. Is there a prohibition for single owners to contribute to the Roth for pass through entity - essentially giving a net zero effect on taxes for the contribution?
How does this pertain to 401(k)’s, is this just for SIMPLE/SEP?
Look at the Employer Roth Contributions section; it is half-way down.
Missed that, clear as day. Thank you.
Tom can you talk about the backdoor Roth and its guidelines.
I am planning to write an article on that in a future edition.
Related to this topic is the relatively unknown maximum that an employee can contribute to his or her SIMPLE IRA (whether or not treated as a Roth) if the employer has less than 25 employees. Automatically the $16,000/$19,500 limits can be increased by 10% for 2024. I have asked multiple financial advisors and CPA colleagues and they were not familiar with this SECURE 2.0 provision. (I wasn't aware until last week, after reading an article...in fact I increased my own SIMPLE contribution!)
Yes, this was in SECURE 2.0. I know I covered it previously in my SECURE 2.0 classes and 2023 update. There were lots of small and large changes in that legislation.