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URL:  http://boards.fool.com/if-you-dont-participate-in-a-retirement-plan-at-27392413.aspx

Subject:  Re: IRA AND TAX QUESTIONS Date:  1/29/2009  11:24 AM
Author:  aj485 Number:  65236 of 76406

If you don't participate in a retirement plan at work, or even if you do and your income falls within eligibility limits...

Well, on first read, I would say that Intuit and/or Kiplinger is miswording this, unless they define "participate" somewhere else that I didn't see in the reference. The IRS, in Pub 590 (as previously suggested for reference), says "covered", not "participate". For instance:

If neither you nor your spouse was covered for any part of the year by an employer retirement plan, you can take a deduction for total contributions to one or more of your traditional IRAs

Someone reading the Intuit site could easily misunderstand Intuit's version of "participate" to mean "contribute to", rather than the correct "covered by" (the IRS' definition), and determine that because they did not contribute to their 401(k), they are eligible to deduct an IRA contribution, when in actuality they aren't.

As previously suggested, Pub 590 also has the income limits - look for Table 1-2.

It's usually best to go to the source, when it's available.

AJ
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