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I have an IRA tax question.

I just started with a new company that will not allow me to participate in a 401(k) for one year (meaning I won't be eligible until 2007.

Can I contribute $4,000 to a traditional IRA and $4,000 for my wife's IRA (she earns about $7,000 annually). I would also like to contribute $4,000 for each of us in a Roth IRA (we are below the income threshold).

However, I have been told that you can contribute to one or the other or split your $4,000 between the two but can't contribute $4,000 to each.

Is this true? It doesn't seem to make sense to me since I would be allowed to max out my 401(k) under normal circumstances and still contribute to a Roth.

Can anyone help answer this for me so I don't do anything stupid this year?

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