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[[I have a 401k that I contributed to in 1998. Then I contributed my $2,000 to a
traditional IRA. Question
is. Can I do this? Or can I correct this & how? I Will a conversion to a Roth
IRA be my answer?]]

You can certainly make an IRA contribution...even with a 401k account. The BIG question is: is the IRA deductible or non-deductible. And that is based upon your modified AGI. If you are a single person and your AGI is greater than $30k, only a portion of your IRA will be deductible. And if your AGI jumps above $40k, you'll have no deduction at all.

And if you find that your IRA is non-deductible, you might want to recharacterize it to a Roth IRA...which would certainly be a better investment deal for you. But there are AGI limitations regarding the Roth IRA also. So you had really better read my posts on these issues in the Taxes FAQ area. You'll get all of the information there.

TMF Taxes
Roy

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