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longhorn
New Member

Can I contribute to a rollover IRA and get the same deduction as opening a separate traditional IRA or is a separate IRA necessary that did not originate as a rollover?

 
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1 Reply
KenH1
New Member

Can I contribute to a rollover IRA and get the same deduction as opening a separate traditional IRA or is a separate IRA necessary that did not originate as a rollover?

You can contribute to an existing Rollover IRA account just as you would a new IRA account and potentially get the deduction and Saver's Credit.  The rollover itself doesn't count towards either the deduction or the credit (that question does come up).

I recommend opening a new IRA, though, for 2 reasons:

-If you ever decide to roll your IRA into an employer's 401k, you may only be allowed to transfer in funds that originated from a 401k

-If your state has income taxes, they most likely will tax the rollover money when you withdraw but not the new IRA money.

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