401(k) and deductible IRA

[Greenbriar]

I'm not clear on my readings on this but a client asked if she could still contribute and deduct an IRA contribution if she also has a 401(k) at work. I don't believe she can. My understanding is if you are in a 401(k), you are considered in a retirement plan and that precludes you from making tax deductible IRA contributions. Would appreciate your comments. Thanks.

[Gary2]

It depends on the numbers. Some can, some can't.

[ATSMAN]

When those questions come in and you want to answer quickly you have to catch yourself because of the phaseout rules:

Trad IRA with Active Participation (Their W2 has the pension or ret plan box 13 checked)

MFJ 95,000 to 115,000
Single, HOH 59,000 to 69,000

BTW I keep my TTB next to the phone. The cover has all this nicely listed.

[Greenbriar]

So there are situations where you can deduct an Ira contribution even if you are in a 401k?

[Greenbriar]

ah yes the phaseout rules

Thanks both of you.

[mastertaxguy]

TTB: rtfm?

When those questions come in and you want to answer quickly you have to catch yourself because of the phaseout rules:

Trad IRA with Active Participation (Their W2 has the pension or ret plan box 13 checked)

MFJ 95,000 to 115,000
Single, HOH 59,000 to 69,000

BTW I keep my TTB next to the phone. The cover has all this nicely listed.

Are you suggesting this is (or was) an RTFM issue?

[jsamans]

So there are situations where you can deduct an Ira contribution even if you are in a 401k?

Yes, certainly. It's all about the phaseout limits for the filing status. (Keep in mind that a non-deductible contribution can be made in any case; however, if a contribution is going to be non-deductible anyway, a Roth contribution should be favored over a non-deductible contribution to a Traditional IRA if AGI allows it.)