Author Topic: No tax deduction for IRA if you have a 401K??  (Read 752 times)

RelaxationSpecialist

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No tax deduction for IRA if you have a 401K??
« on: January 06, 2018, 07:56:27 AM »
This is the first year that we have maxed husbands 401k to $18,000 and both our Traditional IRA's at $5,500 each. (Yea us!!) In checking out tax calculators for 2017 to get an estimate on what we may owe extra in federal taxes, I keep seeing this come up....

"If you are covered by a 401k plan at work, you will receive no tax deduction for your contribution to an IRA."

Does this apply for both of our IRA's, or just my husbands as I do not have a 401k plan at my job?

GizmoTX

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Re: No tax deduction for IRA if you have a 401K??
« Reply #1 on: January 06, 2018, 08:09:14 AM »
Just your husband, & his 401k contribution has already enjoyed being tax deferred. See if you can convert his tIRA contribution for 2017 to a Roth IRA ó itís forever tax free. Otherwise itís not deductible & only tax deferred. Youíll need to decide if you need the deduction for your tIRA or also convert it to a Roth.

Gin1984

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Re: No tax deduction for IRA if you have a 401K??
« Reply #2 on: January 06, 2018, 08:44:58 AM »
Actually it depends on the income level you are earning at. 



seattlecyclone

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Re: No tax deduction for IRA if you have a 401K??
« Reply #5 on: January 06, 2018, 10:17:33 AM »
Yep, the income level at which you can deduct a traditional IRA contribution goes way down if you have a retirement plan at work. Above that level and you'll have to go Roth with your IRA.
I made a blog! https://seattlecyclone.com/

The Roth IRA was named after William Roth, who represented Delaware in the US senate from 1971-2001. "Roth" is a name, not an acronym. There's no need to capitalize the final three letters.

Pizzabrewer

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Re: No tax deduction for IRA if you have a 401K??
« Reply #6 on: January 06, 2018, 10:29:58 AM »
Yep, the income level at which you can deduct a traditional IRA contribution goes way down if you have a retirement plan at work. Above that level and you'll have to go Roth with your IRA.

Of course your ability to do a Roth also phases out, but at a higher income level.

seattlecyclone

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Re: No tax deduction for IRA if you have a 401K??
« Reply #7 on: January 06, 2018, 11:17:10 AM »
Yep, the income level at which you can deduct a traditional IRA contribution goes way down if you have a retirement plan at work. Above that level and you'll have to go Roth with your IRA.

Of course your ability to do a Roth also phases out, but at a higher income level.

The backdoor Roth is always an option though.
I made a blog! https://seattlecyclone.com/

The Roth IRA was named after William Roth, who represented Delaware in the US senate from 1971-2001. "Roth" is a name, not an acronym. There's no need to capitalize the final three letters.

RelaxationSpecialist

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Re: No tax deduction for IRA if you have a 401K??
« Reply #8 on: January 07, 2018, 05:52:02 PM »
Thanks for all the answers!! Going to hold on to the fact that this was an epic year for earnings, and I'll just have to hand over more federal tax $$$$ then I thought. :)