Rich Carreiro <rlcarr[at]animato.arlington.ma.us> wrote:
- quote -

Yes, I see now. Pub590 Worksheet-1 and Table-1

Thanks for the help.

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Vic Dura <vpdura[at]XXXhiwaay.net> wrote:
- quote -

I think you must have missed something in all the other
responses. The DEDUCTIBILITY of the IRA contribution
directly depends on whether or not you were a participant in
the 401k plan. If you (and your spouse) are NOT participants
in such a plan, there is no limit on deductibility. See the
Table in IRS Pub 590 for the AGI cutoffs.

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Vic Dura <vpdura[at]XXXhiwaay.net> writes:

- quote -

No!

401(k) participation does not affect how much you can
contribute to an IRA, but it most assuredly affects
the deductibility of that contribution.

See Pub 590.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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philmarti[at]aol.com (Phil Marti) wrote:
- quote -

Thanks to all for your helpful comments.

So as I understand it then, the IRA deduction is determined
in the same manner as if the TP had not been a participant
in the employer's 401k plan. Is that correct?

Thanks again for your help.

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"Vic Dura" <vpdura[at]XXXhiwaay.net> wrote:

- quote -

401(k) participation has nothing to do with making an IRA
contribution.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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Vic Dura wrote:

- quote -

The person is still considered "covered by a pension
plan" for the purpose of the IRA deduction. However,
the deductible amount may be limited based on Adjusted
Gross Income. Being a participant in a 401k plan does
not affect the ability to contribute to an IRA, but
only the potential deductiblility.

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Vic Dura <vpdura[at]XXXhiwaay.net> wrote:

- quote -

The only restriction on contributing to a personal IRA is
that the money must come from earned income. Being in a
401K does not prohibit you from contributing.

You may be thinking of the restriction on how much of the
contribution you can *deduct* from your income. If you were
eligible to participate in a 401K at any time during the
year, the deductibility may be limited. The limitation
depends on your filing status and AGI, and there's a
worksheet you use to determine it.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA

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Vic Dura <vpdura[at]XXXhiwaay.net> writes:

- quote -

The IRA and 401(k) limits are totally independent. You can
contribute the max to both. Since there was coverage under
the 401(k) in 2004, deductibility of traditional IRA
contributions is subject to the MAGI phaseouts. See
Publication 590.

Phil Marti
Clarksburg, MD

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- quote -

Contribute, sure. Deduct it? Depends on filing status and
AGI. Coverage for one day = coverage for the year.

Helen, EA in PA
I DID IT!
50 miles, 3 days, 1 cause - Multiple Sclerosis Challenge Walk for the Cure
October 1 to October 3, 2004

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If a person is a participant in his employer's 401k plan for
part of 2004 (depositing $900), and then change to a new
employer without a 401k plan, can that person still
contribute to personal IRA for 2004?

If so, how much can they contribute to the IRA? Would it be
$2100 (for a person under 50yrs) or the full $3000?

Thanks for any comments.

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