Can I deduct IRA contributions if I am self-employed, but also receiving payments from a previous employer's retirement plan?
I am retired drawing a pension, but am self-employed doing consulting work. I have reportable income from my business and make contributions to an IRA. I file a joint return with my spouse, who's covered by a retirement plan at work.
If you receive retirement benefits, from a previous employer's plan, you are not considered to be an active participant in a retirement plan. Reference: Publication 590, page 14.
You can make deductible IRA contributions as long as you have earned income and you are under the age of 70.5. Your contribution is either the contribution limit of 6,500 dollars (assuming you are over 50) or your earned income (your self-employment income). You cannot make traditional IRA contributions if you over the age of 70.5.
