IRA deduction - please help me figure out


D

dingodog_1979

Both my husband and I were eligible to participate in the
401(k) in 2006, however none of us participated. Can we
still fully deduct our $8,000 IRA contributions (we're MFJ
and below the AGI phaseout threshold)? All publications I
read talk about active participants in 401(k) not being able
to deduct IRA contributions, however it's not clear to me as
to who is an active participant - one who actually
contributed to 401(k) or one eligible to contribute. Thanks!
 
Last edited by a moderator:
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B

Barry Margolin

Both my husband and I were eligible to participate in the
401(k) in 2006, however none of us participated. Can we
still fully deduct our $8,000 IRA contributions (we're MFJ
and below the AGI phaseout threshold)? All publications I
read talk about active participants in 401(k) not being able
to deduct IRA contributions, however it's not clear to me as
to who is an active participant - one who actually
contributed to 401(k) or one eligible to contribute. Thanks!
Since you're below the phaseout threshold, why does it matter?
You can deduct the IRA contribution whether you participated
in the 401k or not.
 
Last edited by a moderator:
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A

Arthur Kamlet

Both my husband and I were eligible to participate in the
401(k) in 2006, however none of us participated. Can we
still fully deduct our $8,000 IRA contributions (we're MFJ
and below the AGI phaseout threshold)? All publications I
read talk about active participants in 401(k) not being able
to deduct IRA contributions, however it's not clear to me as
to who is an active participant - one who actually
contributed to 401(k) or one eligible to contribute. Thanks!
If your joint AGI is below the phaseout start, then you can
deduct your IRA contributions.
 
Last edited by a moderator:

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