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Level 1

If covered by an empy'r plan for only 1/2 yr(old job) & rolled over to IRA, can full amount to T-IRA be contributed for deduction? If no, how to calc what to contribute?

If I was covered by an employer plan for half of the year (old job) and then rolled over those funds to a IRA, how can I determine what to contribute to my traditional IRA to maximize my deduction? I was not in my employer plan for the last half of the year. 

I know this is based on deductions (https://www.irs.gov/retirement-plans/2017-ira-deduction-limits-effect-of-modified-agi-on-deduction-i...) but would I considered my modified AGI on the first job that i contributed the 401k for (which would be enough to contribute fully) or consider it lumped (which would then be only a partial deduction). If it is a partial deduction, how could I determine what to contribute to maximize the deduction? 

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Level 20

If covered by an empy'r plan for only 1/2 yr(old job) & rolled over to IRA, can full amount to T-IRA be contributed for deduction? If no, how to calc what to contribute?

If you were covered by a workplace retirement plan for any part of the year, you are considered covered the whole year with respect to determining the deductible amount of a traditional IRA.

3 Replies
Level 20

If covered by an empy'r plan for only 1/2 yr(old job) & rolled over to IRA, can full amount to T-IRA be contributed for deduction? If no, how to calc what to contribute?

If you were covered by a workplace retirement plan for any part of the year, you are considered covered the whole year with respect to determining the deductible amount of a traditional IRA.

Level 1

If covered by an empy'r plan for only 1/2 yr(old job) & rolled over to IRA, can full amount to T-IRA be contributed for deduction? If no, how to calc what to contribute?

I know I am considered covered the whole year. I am more asking how to determine the "sweet spot" of contribution to maximize deduction given that I am within the phase out income range (i.e. partial deduction ability).
Level 20

If covered by an empy'r plan for only 1/2 yr(old job) & rolled over to IRA, can full amount to T-IRA be contributed for deduction? If no, how to calc what to contribute?

The amount that is deductible is determined entirely by your AGI without regard to the traditional IRA contribution.  You can use TurboTax to calculate the deductible amount by entering a maximal traditional IRA contribution, then seeing the deductible amount that TurboTax puts on Form 1040 line 32 or Form 1040A line 17.  Then go back an change your originally entered maximal amount to be the deductible amount instead.

If you are interested in the details of how the calculation is done, see this worksheet from 2016 IRS Pub 590-A but substitute the 2017 phaseout limits.  The IRS has not yet published the 2017 version of Pub 590-A.