Dear MMM Community,
We would greatly appreciate your help in figuring out whether we may qualify to contribute to a Traditional IRA and benefit from the tax deduction. We read the following regarding qualifying to contribute to a Traditional IRA:
- If you have a workplace retirement plan (i.e. 401k) the deduction for your traditional IRA contribution is phased out completely if your AGI is $118,000 or more (married couple filing jointly).
- If you're not covered by a workplace retirement plan but your spouse is, your contribution is fully deductible if your combined income is less than $184,000.
Here is the situation:
- My husband and I have an AGI of a little over $160,000, and we file our taxes jointly.
- My husband works at a large company and has a company 401k plan with a company match up to 3%.
- I work at a small company, and I had a company 401k plan where my employer put in 5%, and it immediately vested. However, in February of this year, my employer suspended contributions to all our 401k plans because of a major market downturn. My employer has not closed the plan, but has stopped all contributions to the plan.
Considering the above, would I be eligible to contribute to a traditional IRA and benefit from the tax deduction? Does my situation count as not being covered by a workplace plan?
Thank you in advance for your time and advice!