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My company started the 401k on December so this year I contributed $650, my question if I contribute to my Traditional IRA acccount with $2000, may I write off $2000 or only $1,350 (2,000-650)

Thank you for your help.
My e-mail is Atienzajl@aol.com
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My company started the 401k on December so this year I contributed $650, my question if I contribute to my Traditional IRA acccount with $2000, may I write off $2000 or only $1,350 (2,000-650)

Thank you for your help.
My e-mail is Atienzajl@aol.com


Your company should have already taken the $650 out of your wages and it won't show up as taxable income at all.

You may not particapate in a deductable IRA if you are in (or have available) a qualifing retirement plan (like a 401k). Sorry, but I think that means you can't deduct ANY of the IRA money.

You can still use an IRA, you just can't deduct the money you put in it.

Consult your tax pro for official advice.
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Greetings, Atienza, and welcome. You asked:

<<My company started the 401k on December so this year I contributed $650, my question if I contribute to my Traditional IRA acccount with $2000, may I write off $2000 or only $1,350 (2,000-650)>>

Your participation in the 401k may reduce or even eliminate the deductibility of an IRA contribution depending on your tax filing status and your AGI. Joint filers participating in retirement plans at work may deduct up to $2K each of their IRA contributions when their AGI is $52K or less this year. They may deduct part between $52K and $62K, and nothing when AGI exceeds $62K. The AGI range for a single filer is $32K to $42K in 2000. (Reduce those ranges by $1K for 1999 IRA contributions.) For details, see our IRA area at http://www.fool.com/money/allaboutiras/allaboutiras.htm.

Regards..Pixy
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