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dennykc
dennykc
Level 1
posted
‎June 6, 2019 6:22 AM
last updated ‎June 06, 2019 6:22 AM

I'm over 59-1/2 and still working. If I withdraw $6500 from my traditional IRA in January, can I still make a tax deductible IRA contribution of $6500 that same tax year?

Assume: Contribution would be done after the 60 day loan repayment window.

Assume: I am otherwise allowed to may a $6500 deductible IRA contribution.

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9 Replies
fanfare
fanfare
Level 19
‎June 6, 2019 6:22 AM

I'm over 59-1/2 and still working. If I withdraw $6500 from my traditional IRA in January, can I still make a tax deductible IRA contribution of $6500 that same tax year?

What exactly are you trying to accomplish by taking it out, and then putting it back in ??
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267
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SweetieJean
SweetieJean
Level 20
‎June 6, 2019 6:22 AM

I'm over 59-1/2 and still working. If I withdraw $6500 from my traditional IRA in January, can I still make a tax deductible IRA contribution of $6500 that same tax year?

Sounds like OP needs a temporary loan.
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267
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SweetieJean
SweetieJean
Level 20
‎June 6, 2019 6:22 AM

I'm over 59-1/2 and still working. If I withdraw $6500 from my traditional IRA in January, can I still make a tax deductible IRA contribution of $6500 that same tax year?

Yes, as long as you qualify to do so.  Are you covered by a retirement plan at work?

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dennykc
dennykc
Level 1
‎June 6, 2019 6:23 AM

I'm over 59-1/2 and still working. If I withdraw $6500 from my traditional IRA in January, can I still make a tax deductible IRA contribution of $6500 that same tax year?

A 401K retirement plan is available at work, but I no longer contribute.
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267
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SweetieJean
SweetieJean
Level 20
‎June 6, 2019 6:23 AM

I'm over 59-1/2 and still working. If I withdraw $6500 from my traditional IRA in January, can I still make a tax deductible IRA contribution of $6500 that same tax year?

For a 401(k) plan,

The individual is an active participant if the individual elects to defer compensation (make salary deferral contributions) to the plan.  If the individual is eligible to make salary deferral contributions, but declines to make such salary deferral contributions for a year (and no other contributions or forfeitures are allocated to such individual's account for the plan year ending with or within the individual's taxable year), the individual is not an active participant for that year.
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267
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dennykc
dennykc
Level 1
‎June 6, 2019 6:23 AM

I'm over 59-1/2 and still working. If I withdraw $6500 from my traditional IRA in January, can I still make a tax deductible IRA contribution of $6500 that same tax year?

So, I am not an active participant in a 401K. Does this affect my ability to contribute to my IRA?
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267
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SweetieJean
SweetieJean
Level 20
‎June 6, 2019 6:23 AM

I'm over 59-1/2 and still working. If I withdraw $6500 from my traditional IRA in January, can I still make a tax deductible IRA contribution of $6500 that same tax year?

It just affects your ability to deduct those contributions. But that doesn't matter since you don't participate. But I have to ask, are you over age 70.5?
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267
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SweetieJean
SweetieJean
Level 20
‎June 6, 2019 6:23 AM

I'm over 59-1/2 and still working. If I withdraw $6500 from my traditional IRA in January, can I still make a tax deductible IRA contribution of $6500 that same tax year?

Also see:
<a rel="nofollow" target="_blank" href="https://pocketsense.com/can-ira-deduction-same-year-took-withdrawal-5790.html">https://pocketsense.c...>
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267
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macuser_22
Level 20 macuser_22
Level 20
‎June 6, 2019 6:23 AM

I'm over 59-1/2 and still working. If I withdraw $6500 from my traditional IRA in January, can I still make a tax deductible IRA contribution of $6500 that same tax year?

It does not matter if you contribute to the 401(k) or not if you employer contributed to it then you would still be a participant.    Box 13 on your W-2 will be checked if you have a 401(k).    That does not prevent you from contributing to a Traditional IRA, it only affects your ability to deduct it if your income exceeds the limits given in this link to the IRS:  <a rel="nofollow" target="_blank" href="https://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits">https://www.irs.gov/Retirement-Plans/IRA-...>

You must also have at least as much taxable compensation (money that you worked for) as your IRA contribution.
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