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Subject:  Re: 401K vs. Keogh ....%? Date:  10/4/1998  11:51 PM
Author:  TMFPixy Number:  5838 of 105929

Meowiz asks:

Question: what percentage of your annual income can you contribute to a 401K plan? (employee contribution only, in plan without employer contribution) I would be called a 'part-time employee' with no other benefits if I choose this route.

I am wondering whether to do with my self-employed status, I believe I'm contributing 25% to my Keogh. I think that is the limit.

With 401K can you also contribute to an IRA?

You may contribute the smaller of 25% of your gross compensation or $10K to the 401k. And yes, you can still contribute to an IRA. However, the deductibility of the IRA contribution will be contingent on your Adjusted Gross Income (AGI) and filing status. A single filer covered by a qualified retirement plan (or Keogh) through employment may deduct the full traditional IRA contribution of $2K per year if AGI is $30K or less; part between an AGI of $30K and $40K; and none when AGI exceeds $40K. The range for joint filers is $50K to $60K. If the contribution is non-deductible, then a Roth is the way to go.


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