Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
I had a question for Joel on something in your post. Here's the statement:
...if you or your spouse are eligible for any kind of employer-funded retirement benefit, your IRA cannot be deducted from your taxes.

For instance, any kind of defined-benefit (pension) plan makes your conventional IRA contribution taxable. Also, if your employer contributes just one dollar to your 401(k); or any other approved, tax-advantaged retirement plan, your conventional IRA contributions become taxable.


Now in IRS pub 590, Chapter 1 which deals with traditional IRA's, page 14, something else is stated. If you look at Table 1-2 Effect of Modified AGI on Deduction if Covered by Retirement Plan at Work - If you are covered by a retirement plan at work, use this table to determine if you modified AGI affects the amount of your deduction. The table shows that even if JCook9 contributed to a retirement plan and makes $40,000, he can still take a partial deduction. But if I were single and made $30,000/year and I contributed to my work's 401k, I could still deduct my contribution to a traditional IRA up to the maximum allowable contribution. Actually page 2 has the 2002 changes, which the ranges are $34,000-$44,000 for a single filer, $54,000-$64,000 married.

If I'm reading this wrong, tell me.

Bookm
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.