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Financial Planning / Foolish 401(k)s


Subject:  Re: 401k and/or IRA Date:  10/18/2002  9:03 AM
Author:  W401K Number:  15433 of 26270

In the view of the IRS it does not matter whether you actually participate or not as long as you are eligible. The fact that you are eligible for a 401k or other Qualified Defined Contribution Plna will affect your ability to deduct contribtuions to a Traditional IRA. Please refer to the excellent post (as usual) by MarkOYoung for the details. The IRS is notified of your eligiblity status each year on your Form W-2. I believe it is box 13 on the w-2 that indicates if you are eligible. Whether you participate is not a factor to the IRS.

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