Okay so I contribute to my 401k weekly but I will have some extra money at the end of the year and was wondering if I put it in my Trad IRA will I still get to deduct it?
And yes under normal cirmcumstances I will qualify for the deduction but I was wondering if the money i put into the Tradition IRA account will be pre-tax if I already have a 401k. if not would it be better if I put it into a Roth or is there a way I can just shove the extra cash into my 401k
2007-11-12 06:27:01 · 3 answers · asked by killer_cat_85 1 in Business & Finance ➔ Personal Finance
It's not fully funded but I put enough in to get the company match.
2007-11-12 06:35:08 · update #1
Depending on your income it would most likely still be pre-tax. However, I would recommend putting the money into a Roth. The reason for this is to diversify from a tax stand point. All 401k and traditional IRA monies will be taxed once you withdraw it. On the other hand the Roth is taxed now and will be tax free when you withdraw it.
This way, depending on the tax rate at the time you need it you can determine if you want to pay taxes on it or take it from your Roth tax free. Or you can do a combination of them both.
2007-11-12 06:35:04 · answer #1 · answered by sup 2 · 0⤊ 0⤋
If your 401K is fully funded for the year you may be better off paying the taxes now and putting the funds into a Roth IRA where you will not have to pay taxes on your earnings.
2007-11-12 14:32:55 · answer #2 · answered by countryguyhfc 5 · 0⤊ 0⤋
It depends on your income.
If you are Single and your income is under $52,000, you will get the full deduction. If your income is over $62,000 you will not get a deduction. It it is in between these numbers, you will get a partial deduction.
2007-11-12 14:35:30 · answer #3 · answered by Wayne Z 7 · 0⤊ 0⤋