2007-02-25 01:35:50 · 6 answers · asked by WG 1 in Business & Finance ➔ Taxes ➔ United States
Depends on how much you made but the short answer is YES!
IRA's and 401K's are independant from each other. You can contribute the max to the IRA (hopefuly it's a ROTH IRA) and still contribute the max to the 401K.
2007-02-25 02:12:44 · answer #1 · answered by oldsoftee2001 6 · 0⤊ 0⤋
Wayne and Ninasgramma are correct. Being in a 401k for even 1 day makes you have to fall within the income phaseout numbers to be able to deduct the contribution. See the IRS website to get the true phaseout numbers as if you're married then it makes a difference if your wife was covered by a plan or not.
Note: If you're over the phaseout amounts then you can still contribute...but it will be non-deductible. At that point you may be over the ROTH phaseout limits too.
2007-02-25 14:31:48 · answer #2 · answered by digdowndeepnseattle 6 · 1⤊ 0⤋
You are considered a participant in an employer retirement plan. You can contribute $4,000 to an IRA regardless of the 401k contribution.
The IRA contribution will be fully deductible if your income is under $50K for single filers, or $75K for married filing jointly. If your income is over these limits, your deduction will be limited or eliminated.
You have until April 17 to make your contribution.
See Worksheet 1-5 in the following IRS publication to figure your partial deduction.
http://www.irs.gov/publications/p590/ch01.html#d0e1397
2007-02-25 11:32:11 · answer #3 · answered by ninasgramma 7 · 1⤊ 0⤋
ninasgramma is correct, however note that you would have to contribute to a TRADITIONAL IRA if youre looking for a tax deduction on your tax return. if youre filing single and you made over $60,000, you would not get a deduction. If you made under $50,000 your contribution would be deductible. If you made somewhere in between, you would get a partial deduction. The maximum contribution is $4,000 for 2006.
contributions to ROTH IRAs are not tax-deductible.
2007-02-26 01:54:43 · answer #4 · answered by tma 6 · 0⤊ 0⤋
If you are over the income limit, having a 401k for even 1 day disqualifies you from doing a deductable IRA.
2007-02-25 12:54:40 · answer #5 · answered by Wayne Z 7 · 0⤊ 1⤋
It depends on how much you contributed to the 401(k). You are limited to $4000 deduction for a traditional IRA. If you contributed more than that to the 401(k), you can still contribute, but you can't take the deduction. You can still contribute to a Roth IRA (up to $4,000 or your earned income, whichever is lower), but you don't get a tax deduction for it.
2007-02-25 09:56:15 · answer #6 · answered by khill 2 · 0⤊ 3⤋