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Greetings, Patmutz, and welcome. You asked:

<<At the end of last year, I established a sole-proprietorship. My husband will make $80,000+ this year and is a participant in his company's 401(k) plan. I expect to gross ~$80,000 in 1999. I have set up a SEP/IRA and plan to contribute 13% as my employer contribution. As I understand it, because we "make too much," I am not allowed to make a deductible employee contribution to my IRA, but can make up to a $2,000 non-dedectible contribution. Is my understanding correct? >>

You and your hubby are both covered by a retirement plan and will be above the AGI limits in 1999 for a deductible contribution to a traditional IRA because of that coverage. You both, though, may make a nondeductible contribution of up to $2K each to an IRA. If your joint AGI is $150K or less, that can go to a Roth IRA. That's a better choice than the traditional because ultimately everything will come out tax-free. If your AGI will exceed $160K, though, you will be limited to the nondeductible traditional IRA. Either way, you can still use the IRA.

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