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Author: gzieve Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75379  
Subject: 401k and IRA deductions Date: 1/2/2001 11:33 AM
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If I utilize my company's 401k program and contribute over $2000/yr, and if I also contribute $2000 to my traditional IRA, am I no longer allowed to make a $2000 deduction from the IRA contribution?

In that case, I'd be better off opening a Roth IRA...right?
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Author: tsouth Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26886 of 75379
Subject: Re: 401k and IRA deductions Date: 1/2/2001 12:29 PM
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If I utilize my company's 401k program and contribute over $2000/yr, and if I also contribute $2000 to my traditional IRA, am I no longer allowed to make a $2000 deduction from the IRA contribution?

In that case, I'd be better off opening a Roth IRA...right?

...............

gzieve,

If your company even offers a 401k and you are qualified to put into it, but don't contribute, then you CAN NOT deduct a contribution to a Traditional IRA.

If you want to put some money into a 401k and some into an IRA, there would be more of a tax benefit to open a Roth IRA. You might also consider putting more into your 401k before you start a Roth IRA.

Best of Luck,

Teresa

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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26887 of 75379
Subject: Re: 401k and IRA deductions Date: 1/2/2001 12:46 PM
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Teresa writes:

If your company even offers a 401k and you are qualified to put into it, but don't contribute, then you CAN NOT deduct a contribution to a Traditional IRA.

That's not quite true. If neither you nor your employer contributes to the 401k on your behalf, then you are not a participant in that plan provided no contributions were made to that plan for your account on any day during the year. If you are not a participant in a qualified retirement plan (e.g., a 401k plan to which you and your employer may contribute or a pension plan to which only your employer contributes), then you are eligible for a fully deductible contribution to a traditional IRA.

Do you have a pension plan or do you and/or your employer contribute to a defined contribution plan on your behalf? Then you are a participant in that plan. That means a contribution to a traditional IRA may or may not be deductible depending on your filing status and your adjusted gross income. See our IRA area at http://www.fool.com/money/allaboutiras/allaboutiras.htm for details.

Regards..Pixy


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Author: Ringfinger Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26893 of 75379
Subject: Re: 401k and IRA deductions Date: 1/2/2001 4:53 PM
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At one point in my life, I made deductible contributions to an IRA along with having a 401k. Now, my income prohibits, so I am off to Roth land.

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