Does 401K limit my IRA ?

Taxes General Forum - Tax professionals meeting place and answers to queries. (Moderated) 

Yahoo!   Google   Windows Live   del.icio.us   digg   Netscape

Subject Author Date Does 401K limit my IRA ? utilitarian 01-21-2008  Re: Does 401K limit my IRA ? Harlan Lunsford 01-21-2008  Re: Does 401K limit my IRA ? removeps-groups@yahoo.com 01-21-2008  Re: Does 401K limit my IRA ? kastnna 01-22-2008
Posted by utilitarian on January 21, 2008, 5:33 pm Please log in for more thread options Hi, I contribute the max ($5,000) to an IRA every year since I haven't had a 401K. But this year my employer is offering me in a 401K plan. If I choose to particpate in the 401K, will this affect my IRA contributions ?? Thanks -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Harlan Lunsford on January 21, 2008, 6:17 pm Please log in for more thread options utilitarian wrote: > Hi, > > > I contribute the max ($5,000) to an IRA every year since I haven't > had a 401K. > > But this year my employer is offering me in a 401K plan. > > If I choose to particpate in the 401K, will this affect my IRA > contributions ?? > > Thanks > By "this year' you mean 2008 I presume. (never ASSume!) Yes, it could at that. But even if it might limit your contributions to a "regular" (we call 'em traditional) IRA, you might still qualify for a ROTH IRA, which I wholeheartedly endorse. It's the best thing since canned dog food. ChEAr$, Harlan Lunsford, EA n LA -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by removeps-groups@yahoo.com on January 21, 2008, 7:12 pm Please log in for more thread options >   I contribute the max ($5,000) to an IRA every year since I haven't > had a 401K. > >   But this year my employer is offering me in  a 401K plan. > >   If I choose to particpate in the 401K, will this affect my IRA > contributions ?? No, your IRA contribution limits are not affected, but the amount you can deduct is. For single taxpayers the phaseout begins at around 52k and ends at 62k -- see the worksheet in the instructions. Be sure to report the non-deductible contributions on form 8606. For the Roth IRA the phaseout is from 99k to 114k. If your income is more than 114k, I recommed you contribute to a traditional IRA and convert it to a Roth when your income drops or in 2010 when supposedly there won't be an AGI limit to add to a Roth or convert a traditional IRA to a Roth. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by kastnna on January 22, 2008, 12:17 am Please log in for more thread options > Hi, > >   I contribute the max ($5,000) to an IRA every year since I haven't > had a 401K. > >   But this year my employer is offering me in  a 401K plan. > >   If I choose to particpate in the 401K, will this affect my IRA > contributions ?? Contributions, no. Deductibility, maybe. Just to be clear, the contribs are also deductible however and the max limits are higher. If there's an employer match, that's even better. Chin up, a 401k is rarely a bad thing. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted Re: 401K vs IRA maximum annual contribution limit difference April 11, 2006, 3:31 am Re: 401K vs IRA maximum annual contribution limit difference April 14, 2006, 4:04 am Solo 401K (aka Individual 401K) same as Super-Simplified 401K? December 3, 2007, 12:49 am 401K for W-2 job, plus "individual" 401K for 1099 income ? March 17, 2008, 8:28 pm Roth 401K vs. "Regular" 401K? January 1, 2008, 9:13 pm Roth IRA contribution limit June 18, 2006, 11:48 pm Is there a gift limit age for children November 4, 2008, 2:49 pm 20500 limit for 403b contributions January 9, 2008, 3:09 pm pre-tax dependent care limit for 2 children June 8, 2006, 3:01 pm Limit on years for cap loss carryover? April 6, 2009, 9:30 pm