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Level 2

Question

Traditional IRA basic contribution question

Forum|Forum|5 years ago
April 12, 2021
1 reply
8 views

I work for a company and have a 401K retirement plan. Married filing jointly and am over 50 yrs old. I have a Traditional IRA. Am I correct in my belief that I can contribute up to $7000 ($6000 + 1000 since over 50 yrs old) for the 2020 tax year? And I can contribute this amount up to the tax deadline date of April 15, 2020 (now extended to May 17th)? Thank you.

Level 15

All correct (assuming that you have at least $7,000 of compensation to support the IRA contribution). However, a traditional IRA contribution may or may not be deductible depending on your modified AGI for the purpose:

https://www.irs.gov/retirement-plans/plan-participant-employee/2020-ira-contribution-and-deduction-limits-effect-of-modified-agi-on-deductible-contributions-if-you-are-covered-by-a-retirement-plan-at-work

thepepAuthor

Level 2

Understood. Income > $7k and not eligible for deduction but better to put in IRA than sit in bank I hope. Thanks!