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My job offers a 401k, but I want to use a traditional IRA instead. If I opt out of the 401k, will I be able to get a deduction for contributions to the IRA?
I am basing my question on this information. https://www.irs.gov/retirement-plans/are-you-covered-by-an-employers-retirement-plan
My understanding is that, if my employer has a 401k plan, but nothing is allocated to my account, I should still be able to get a deduction for contributions to my IRA.
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My job offers a 401k, but I want to use a traditional IRA instead. If I opt out of the 401k, will I be able to get a deduction for contributions to the IRA?
On the other hand, you can't self-direct a 401k as you can with an IRA.
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My job offers a 401k, but I want to use a traditional IRA instead. If I opt out of the 401k, will I be able to get a deduction for contributions to the IRA?
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My job offers a 401k, but I want to use a traditional IRA instead. If I opt out of the 401k, will I be able to get a deduction for contributions to the IRA?
If you are covered by a plan, then your eligibility to make deductible IRA contributions depends on your income and filing status according to the links here. https://www.irs.gov/retirement-plans/ira-deduction-limits.
You are covered if a plan is available and you are eligible to participate, even if you choose not to participate.
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My job offers a 401k, but I want to use a traditional IRA instead. If I opt out of the 401k, will I be able to get a deduction for contributions to the IRA?
Doesn't this suggest that, if no contributions are made to the account, I am not "covered"?
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My job offers a 401k, but I want to use a traditional IRA instead. If I opt out of the 401k, will I be able to get a deduction for contributions to the IRA?
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My job offers a 401k, but I want to use a traditional IRA instead. If I opt out of the 401k, will I be able to get a deduction for contributions to the IRA?
I also disagree with @Opus 17 ...I don't think you are considered covered by a defined contribution plan if you opt out
Form W-2, Box 13
The “Retirement plan” indicator in Box 13 shows whether an employee is an active participant in your company’s plan. If this box is checked, it lets the recipient know that depending on their filing status and modified adjusted gross income, they may not be entitled to a full deduction for their traditional IRA contributions. You should check the retirement plan box if an employee was an “active participant” for any part of the year
Active participant
Generally, an employee is an active participant if covered by a:
- defined contribution plan (for example, a 401(k) plan) for any tax year and is credited with any contributions or forfeitures, or
- defined benefit plan for any tax year that the employee is eligible to participate.
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