I have never itemized, as my standard deduction has always more than covered things like my 401k contribution. We bought a house this year, and I would love to be able to itemize! Bad news is I also got downsized (week before we closed, no less!) so I'm guessing the 6 months of 401k contributions + interest on the home will still not be greater than my standard deduction.
Here's my question: if I roll my 401k into a regular IRA, can I deduct the $4k max contribution to the IRA rather than deduct the contributions I made the 1st 6 months of this year to the 401k?
2006-11-07 07:36:50 · 5 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
First of all, 401(k) contributions and IRA contributions do not figure into itemized deductions.
If your joint income was over $85,000, you are not eligible to deduct anything for 2006 for an IRA contribution. Your participation in the 401(k) during the early part of the year cannot be undone. If your joint income is under $75,000, you may still make a deductible IRA contribution; and if it is over $75,000 but less than $85,000 the amount of the allowed deduction will be limited.
2006-11-07 08:17:36 · answer #1 · answered by Andreas 3 · 0⤊ 0⤋
The 401K was withheld from your wages and will not be included in box 1 of your w-2. Because you were a participant in an employer plan during any part of the year you would only be able to deduct an IRA contribution if you adjusted gross income is less than $50,000. If your AGI is over $60,000 none of the IRA would be deductible, and between those numbers part of it would be deductible.
2006-11-07 23:09:33 · answer #2 · answered by waggy_33 6 · 0⤊ 0⤋
Yeah your 401(k) contributions has nothing to do with the standard deduction or itemizing. Youre thinking of the adjustment for a traditional IRA contribution in arriving at your AGI (adjusted gross income). And no, you cant deduct your IRA contribution b/c you already saved the taxes on this money when you contributed it to your plan.
Since you bought a house, you will have mortgage interest and real estate taxes to itemize on Schedule A. If it isnt enough to itemize in 2006, you will be able to itemize in 2007.
2006-11-07 20:32:56 · answer #3 · answered by tma 6 · 0⤊ 0⤋
NO! You can not take a deduction of money already in a 401k that you roll over to an IRA. It is already pre-tax dollars.
2006-11-07 10:12:25 · answer #4 · answered by ? 6 · 1⤊ 0⤋
your checklist your extra contributions on 8606 or you are able to take the surplus and make contributions to a Roth, which isn't taxable at get right of entry to or distribution(keeping era 5 yrs) your 2009 extra may be too late to ward off the effects
2016-10-03 09:37:35 · answer #5 · answered by ? 4 · 0⤊ 0⤋