You can always contribute to a traditional IRA. The only
question is whether your contribution is deductible. If you
were covered by a retirement plan for even one day, then the
ability to deduct your contribution starts to phase out at
$50,000 if single or head of household, $0 if married filing
separately, or $70,000 if married filing jointly.

You can contribute to a Roth IRA if your income is less than
$150,000. Contributions are not tax-deductible, but when you
take the money out, the distributions are tax-free.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

fpgabuilder-news[at]yahoo.com wrote:

- quote -

You can always contribute to an IRA if you had earned income
that year. The only 401k-related restriction is on whether
you can DEDUCT the contribution.

If you were covered by a 401k for any period of the year,
the IRA deduction limitations apply. One day of 401k
coverage is all it takes to lose the ability to deduct IRA
contributions. There's no pro-rating of the deductibility.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

fpgabuilder-news[at]yahoo.com writes:

- quote -

(1) Being in a 401(k) has no effect on your ability to
*contribute* to an IRA. It only has an effect on your
ability to *deduct* a traditional IRA contribution.
(2) Participating in a 401(k) for even a single day brings
the deduction limitation rules into play.
See IRS Pub 590.

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

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

fpgabuilder-news[at]yahoo.com wrote:

- quote -

Of course you can contribute to an IRA, but your
participation in a qualified employer retirement plan may
make the contribution NONdeductible. The fact that you had a
short period when you were not covered by such a plan is
irrelevant. If you are covered for as little as one day
during the year, you are considered covered for the whole
year.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

I had two full-time jobs at separate times during 2005. I
was covered by 401K plan during both the tenures. But I had
about 3.5weeks of time between the two jobs when I was not
employed and therefore did not belong to a 401K plan. Can I
contribute to an IRA for the period during which I was not
covered by 401K plan?

I would appreciate your advice.

Thank you.
Best,
-Sanjay

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >