I made one contribution to my 401(k) this year prior to being terminated. I am now self-employed. Can I make a deductible IRA contribution? What is the limit?

It seems that the limit would be the max. IRA contribution, minus my contribution to the 401(k) and the company match.

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1 Best answer

Level 15

Jun 4, 2019 4:20:32 PM

Provided that you have sufficient eligible compensation remaining after subtracting out your 401(k) elective deferral, the amount you are permitted to contribute a traditional IRA is unaffected by your participation in the 401(k).

See IRS Pub 590-A, How Much Can Be Contributed?

https://www.irs.gov/publications/p590a/ch01.html#en_US_2016_publink1000230381

However, because you were an active participant in the 401(k) plan for 2017, the amount of that contribution that you are eligible to deduct will depend on your modified AGI.

See IRS Pub 590-A, Limit if Covered by Employer Plan:

https://www.irs.gov/publications/p590a/ch01.html#en_US_2016_publink1000230467