I have read some pretty poor threads on this site after doing some searches. I would like the following questions answered with the relevant documentation. Suppose I made $125,000 in the United States in 2014 and contributed $17,500 to an employer's 401k plan. Assuming no other variables would I be able to contribute the phased out amount (less than $5,500) to a Roth IRA, or the full amount ($5500) based on the $125,000 - $17,500 = $107,500 amount? I know it is all related to Modified Adjusted Gross Income. Thanks in advanced and sorry for beating a dead horse.
Depends- If you are filing as single:
If you contributed to a traditional 401k - you can contribute the full $5,500 to a Roth IRA
If you contributed to a Roth 401k - you would have a phased amount to contribute to your Roth IRA
Some employers offer both traditional and roth 401k so your answer depends on which one you elected to contribute to.
Reason: It's like you said - it's about the Modified Adjusted Gross Income (MAGI)
If you contributed to a traditional 401k - your MAGI is $107.5k (Under the $114k single filer limit)
If you contributed to a roth 401k then your MAGI is still $125k
Married filing jointly - You can contribute the full amount to a roth IRA as the limit is $181k
Married filing separately You can't contribute at all to a roth IRA
If you want to learn more about roth vs traditional
Or if you already contributed too much to a roth IRA: