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pam3
New Member

If I didn't contribute enough to my 401K in 2018, can I contribute to an IRA to reduce my 2018 tax liability?

being over 50 I am allowed to contribute pretax $25k to my 401k however my contributions in 2018 only amounted to $19k - can I contribute $6k (the difference) to an IRA to reduce my tax liability?

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Accepted Solutions
macuser_22
Level 15

If I didn't contribute enough to my 401K in 2018, can I contribute to an IRA to reduce my 2018 tax liability?

Whether it is deductible or not depends on your MAGI - see IRS link below.

For 2015, 2016, 2017 and 2018, your total contributions to all of your traditional and Roth IRAs cannot be more than:

- $5,500 ($6,500 if you’re age 50 or older), or
- your taxable compensation for the year, if your compensation was less than this dollar limit.
(Taxable compensation is generally money that you worked for - W-2 or self-employed income).

See this IRS link for Traditional IRA deduction limits when covered by a retirement plan at work.

https://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

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1 Reply
macuser_22
Level 15

If I didn't contribute enough to my 401K in 2018, can I contribute to an IRA to reduce my 2018 tax liability?

Whether it is deductible or not depends on your MAGI - see IRS link below.

For 2015, 2016, 2017 and 2018, your total contributions to all of your traditional and Roth IRAs cannot be more than:

- $5,500 ($6,500 if you’re age 50 or older), or
- your taxable compensation for the year, if your compensation was less than this dollar limit.
(Taxable compensation is generally money that you worked for - W-2 or self-employed income).

See this IRS link for Traditional IRA deduction limits when covered by a retirement plan at work.

https://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
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