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Asked 2/6/2007
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Am I able to qualify for a deductible IRA if the only retirement plan my company offers is a 401K? My question concerns only a fully deductible IRA, and the confusion over the IRS wording "to quality....you must not be eligible to participate in a company retirement plan". My company does not offer a pension plan , but does offer a 401k plan, so does that disqualify me from a deductible IRA ? Basically the question comes down to the defination of a "company retirement plan". |
Answer 1/4 - Submitted 2/6/2007
401k plan is considered a company retirement plan for what you are asking about. Note: actually participating is irrelevent. Your eligibility to participate is what drives this. You still may be able to qualify for it if your spouse (if any) doesn't offer a plan.
Of course this assumes that you are over the income phaseout limits. I assumed you were as you specifically mentioned the wording and didn't ask the typical vague question.
Answer 2/4 - Submitted 2/6/2007
It depends on your income.
I believe the deductable IRA starts phasing out at about $50,000 per year.
If you are under this, you should be able to do both.
Answer 3/4 - Submitted 2/6/2007
Wow, that must be new because I have a 401K and have been investing in an IRA for years.I will have to look the code up.
Answer 4/4 - Submitted 2/6/2007
You do qualify for an IRA if your company offers a 401(k) plan. You qualify for a regular IRA if your income is less than 75,000 for 2006. You can make a partially deductible contribution if your income is below 85,000. These amounts increase for the 2007 tax year to 83K and 103K.
If you don't qualify for the deductible traditional IRA you may qualify for a non deductible ROTH IRA.
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