How does being an active participant in an employer-sponsored retirement plan potentially affect my ability to make a tax-deductible contribution to a Traditional IRA?
If either you or your spouse is considered an active participant in an employer-sponsored retirement plan, the ability to deduct from income tax your Traditional IRA contributions will depend on your modified adjusted gross income (MAGI). If your MAGI is below the applicable threshold, you may make a fully deductible Traditional IRA contribution of $5,000 for 2009 ($6,000 if you qualify for a “catch-up” contribution). However, if your MAGI is above the threshold, you will only qualify for a partial deduction or no deduction at all depending on the amount of your MAGI. The following chart highlights the deductibility phase-out ranges for Traditional IRAs from 2005 through 2009.
Related Questions
- I was a salaried employee and a participant in the BNI Plan as of Dec. 31, 1988; how does this affect my ability to take a lump sum pension benefit?
- Does contributing to an employer-sponsored retirement plan affect eligibility for a traditional IRA?
- Do rollovers affect an individual’s ability to convert a traditional IRA to a Roth IRA?
