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Asked 3/25/2006
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i did not contribute to company retirement plan or 401k. Can I contribute to IRA? I joined new employer in Sep,2005. I was eligible to join 401K from Nov2005. I did not contribute to 401k plan. Box 13 in my W2 (retirement plan) is checked. |
Answer 1/4 - Submitted 3/25/2006
Yes, you can contribute to IRA upto $4000.00 ($4500.00 for over 50). However, If you contributed to company retirement plan, your IRA contribution benefit starts to phase out depending upon the proportion of contribution to company retirement plan. When box 13 is checked, although you may not have made contribution, however, your employer sets aside a portion for your retirement. You are only benifited when you retire through same employer.
Answer 2/4 - Submitted 3/25/2006
Answer 3/4 - Submitted 3/25/2006
The reason it is giving you a lower amount is because you made too much money. If your employer has a 401k available and you make over a certain amount than you are subject to a phase out. Go to http://irs.gov and download publication 590. It gives great examples and has the table that shows the income levels and phase outs.
Answer 4/4 - Submitted 3/25/2006
You might have made to much money. Did you also fill out an 8880? You look at the form 8606 it will show you how much you can take. You should see an amount on line 32, line 57(if you filled out the 8880) on the 1040. Also this is one of the credits that will only lower your tax liability. It can bring you to a 0 tax.
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