> NY state

Then yes. It should be deductible.

First, have you considered whether or not you meet the requirements to actually take the deduction?

Review the charts in this link:

• https://www.irs.gov/retirement-plans/ira-deduction-limits

Start there.

Then, if the answer is "Yes, it is deductible at the federal level for me," then reveal which exact state you are referring to.

Your issue is referred to as "Pro Rata Taxation."

Pay attention particularly to Screwup #5 in the Second Link.

Read this for everything you need to know about Backdoor Roth and Form 8606:

• https://www.whitecoatinvestor.com/backdoor-roth-ira-tutorial/

Read this list of common screwups and solutions with respect to backdoor Roth. Beware of Screwup #5.

• https://www.whitecoatinvestor.com/fix-backdoor-roth-ira-screw-ups/

As you've discovered... Costs you $75 each time you buy it.

You should be buying either any brand of ETFs or Charles Schwab specific brand of mutual funds.

Schwab's SP500 fund is SWPPX.

Personally, I use total market funds, but that's besides the point.

The data you'd need to figure out is the interest rate on your anticipated loans.

> only 20% match rate up to 6% of salary

Worded a bit confusingly.

But anyways, at minimum, this likely means an equivalent of a ROI of at least 20%.

Unless your loan interest is near that, I wouldn't pass up on getting at least the employer match.

> Hmm, ok so maybe it’s just a chase thing.

Not "just a chase" thing.

But now I'm just repeating myself.

> My buddy who banks with a local CU says when he deposited his check it only took 1 day for it to process.

Then it sounds like if you want what your friend has, you should consider moving to the CU.

> The weird thing is I’ve deposited a big check at chase before but was fine?

Different financial institutions, different policies, different rules, different quirks.

It is not abnormal nor illegal for financial institutions to impose a waiting period on deposited checks.

In general, this should actually be your expectation moving forward. Institutions that allow you access to funds earlier tend to be the exception rather than the norm.

May I ask why the other folks in the household not contributing to the household budget?

Is this home that you live in owned or rented?

If that's what your State says, then sure.

You haven't revealed enough data for an internet stranger to confirm/deny your conclusion.

The first question to figure out is:

• Does my state offer a tax incentive?

If so, then the next question is:

• What are the details surrounding that tax incentive?

There’s no previous years for you so there’s nothing to compare against.

Being audited isn’t as onerous as it may sound.

You can worry less about being audited the more accurate your records are.

If audited, you just get letters in the mail asking for you to submit the proof that you should already have maintained to substantiate your claims. That’s the vast majority of audits.

There’s no person with a badge who comes knocking on your door and shining flashlights in your eyes. There’s no handcuffs. There’s no chains. There’s no whips.

Just plain old boring paperwork.

> How come their yearly performance is not identical, though?

They are identical.

• https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VOO&allocation1_1=100&symbol2=VFFSX&allocation2_2=100

You're working on one end (raise income).

Try working on the other end (reduce expenses).

Write out your budget.

Write out your expenses.

Decide what can be cut.

Decide what can be reduced.

Decide what is necessary.

You know what a PB&J is?

Some folks hate jelly and only like PB. So they only buy PB.

Some folks hate PB and only like jelly. So they only buy jelly.

Some folks like PB&J... so they buy both PB and jelly.

PB and jelly can be VOOV and VOOG.

VOO is PB&J.

But what might be even better is just buying the entire supermarket.

And that's VTI/VTSAX

Your mistake is in believing that non-deductible contributions to tax deferred assets (ie traditional/Aftertax) result in a taxable liability.

The net effect of the Backdoor strategies is that it effectively increases Roth space without additional tax liability.

You can roll the money to an IRA at a custodian of your choice.

Sounds like you need very concrete instructions. Assuming you are interested in doing the most financially efficient route, this would mean maintaining the tax advantaged status of the 401k money.

• Go to Vanguard.com, Fidelity.com, Schwab.com
• Pick one of the above.
• Click through to open a Rollover IRA (or Traditional IRA). Write down your account number.
• Click through to transfer an external account. You will enter in your 401k information. An address will be supplied to you. KEEP THIS ADDRESS.
• Go to your 401k.
• Choose: A direct roll over
• Provide the IRA account information that you just opened. Provide the IRA account number.
• Provide the address for the 401k to mail the check. Sometimes the 401k mails the check to you and then you have to mail it to your IRA.

Call your IRA's 1800 phone number if you run into trouble or confusion or if you don't know what to do next. All of them have people who will sit on the phone with you and walk you through everything, step by step, click by click.

Your post provides no new data. You are likely to receive no new guidance.

It's not clear what your current situation is. Still a student? Working part time, okay, so what are you doing with the "other" time?

Why did the military "fall through?"

What did your university's financial aid office say?

Why does it feel like making payments on the loan not an option?

> I need money for bill

Friend... You do whatever you feel best.

But as an internet stranger who has no skin in your game, your highest yield for effort is likely going to be in evaluating your budget and examining your expenses.

Cash out your money if you please. It's yours to do with as you wish. I'm sorry you feel slighted that you have 401k contributions when you felt like you were never asked. It may be difficult to accept that it may be better to leave the money invested as it seems like emotions are involved.

Good luck to you.

> you give me another $1200 dollars that is just lost in the sauce.

I would challenge this calculation.

The OP is looking at a time horizon of 20 years.

Properly invested, the value of 1K will likely far exceed 1.2K.

> Yes on the present like bills and groceries.

That's the problem. You're not performing a direct rollover. That's not the right option.

You should really really really reconsider proceeding with your plan.

Not only will you be paying ordinary income tax, you will also pay a 10% penalty.

It's like having $100 in your pocket and then choosing to light probably $30 on fire in order to spend $70.

Do you like lighting your own money on fire?

Yes? Yes you are trying to spend the 401k money on stuff in the present?

> I’m trying to take out my 401K

When you say "take out" are you attempting to cash out?

As in, you're trying to take the 401k money out to spend? Like on lobster, steak, clothes, cars, jewelry, etc?

It's no different than making 1 extra full month mortgage payment per year.

• 52 weeks / yr
• 26 biweeks / yr
• 1/2 Mortgage payments * 26 = 13 months worth of Mortgage payments

> my father keeps saying pulling from 401 k is good

Your father probably means well.

But quite frankly, stop taking financial advice from dear father.

Be wary of draining your future to finance you present.