Hi
Question - i've never contributed a cent to my 401k (i started this year - 2021). In the past my company has contributed a few hundred dollars ($300 in 2020) and i've always withdrawn it right away, taking the penalty.
As i was filling out my taxes in turbotax today it asked if i'd contributed to a traditional IRA, as apparently until april 15th i can do it and still take the deduction.
looked it up and putting $6000 into it, will give me a $2000 deduction (!!!)
if that's the case i will open a traditional IRA and put $6k in, but the 401k part scares me. i have never in my life contributed $0.01 into any 401K.
it says "Your deduction may be limited if you (or your spouse, if you are married) are covered by a retirement plan at work and your income exceeds certain levels"
does 'covered' mean it's available to me, even if i don't contribute?
want to do the right thing. what should i do here? if i can somehow get this deduction (the honest way) i want to.
cliffnotes: my company offered a 401k but i never contributed to it, and they contributed only $300 the whole year (when i left the company - i got a 1099-R when i withdrew the $300 last year). since the company does offer a 401k, even though i don't contribute to it, can i take the traditional IRA deduction?
