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is it possible to contribute to an IRA and 401K?

Yes, except that your IRA tax-deferral is subject to income restrictions. Each has its own contribution limit. The IRA is $2000. The 401k is the lesser of $10,000 or your plan percentage limit.

You did not say if you are single or married. If you are single, it is to your advantage to participate in your employer's 401k, since it is completely tax-deferred, and it reduces your AGI, making your IRA more tax-deferred. If you are single, making between 30 & 40k per year, you are in the 28% bracket and your IRA is only partially tax-deferred. For each 1k (or fraction) above 30k, your IRA deductibility is reduced by 10%.


Zev
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