IRA & 401(k) half year

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  • MAJ
    Senior Member
    • Oct 2008
    • 382

    #1

    IRA & 401(k) half year

    I have a client who was in both an IRA and 401(k) during the year.

    He was putting into IRA all year. Monies withheld direct from Pay to IRA.
    T/P joined 401(k) mid-year - $118 per pay.

    IRA $3,068.00
    401(k) $1,116.00

    Based on this he cannot deduct the $3k for the IRA - Is there a way around this??

    Thanks in advance..

    MAJ
    Matthew Jones
    Tax Preparation
    Computer Consultant


    Tax Season is here!
    Make sure everything is working, extra ink or toner is available, Advil in top drawer!

  • Kram BergGold
    Senior Member
    • Jun 2006
    • 2112

    #2
    IRA problem

    I assume the client's income is too high to dedcut IRa when covered by pension plan.
    Optiosn are remove IRA contribution by 4/15/09. Leave it in as a non deductible contribution. If eligible, recharacterize it as a Roth.

    Comment

    • MAJ
      Senior Member
      • Oct 2008
      • 382

      #3
      IRA & 401(k) half year

      Combined income ( MFJ ) was $113,000.

      What is the limit?

      Thanks
      Matthew Jones
      Tax Preparation
      Computer Consultant


      Tax Season is here!
      Make sure everything is working, extra ink or toner is available, Advil in top drawer!

      Comment

      • BP.
        Senior Member
        • Oct 2005
        • 1750

        #4
        Originally posted by MAJ

        What is the limit?

        Thanks
        Really gotta love TTB-- they put this right on the front cover for us!
        MFJ phase out range is $85,000-$105,000, so Kram's right -- do a Roth.

        Comment

        • Larmil
          Senior Member
          • Dec 2006
          • 621

          #5
          Originally posted by BP.
          Really gotta love TTB-- they put this right on the front cover for us!
          MFJ phase out range is $85,000-$105,000, so Kram's right -- do a Roth.
          I think my best investment is TTB's FastTaxFacts. It is awesome.

          Comment

          • MAJ
            Senior Member
            • Oct 2008
            • 382

            #6
            401(k) & IRA contributions

            I guess I should rephrase.

            Since the t/p paid into both during the year {IRA: 3500 & 401(k) 1100} is there a way to take the IRA deduciton and forgoe the 401(k) deduciton since that is the greater of the two? The client changed mid-year {unknow to me}.

            I had suggested he join the 401(k) to take advantage of the 2% match.
            He finally did mid-year but neglted to turn off the IRA - Left more going to it than the 401(k). Some how this is my fault!

            Can I add the $1,100 from the 401(k) back in somewhere on the return, uncheck the retirement option on the W2 and clamin the IRA deducitons to get some of the tax benefits of the $3,500 deduciton instead of $1,100?

            Thanks...
            Matthew Jones
            Tax Preparation
            Computer Consultant


            Tax Season is here!
            Make sure everything is working, extra ink or toner is available, Advil in top drawer!

            Comment

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