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suelindbo
New Member

Why does Turbo Tax allow us to enter a contribution to a traditional IRA if we contribute to a 401k with our employer

An accountant told us you cannot make a traditional IRA contribution if you contribute to a 401k through your employer.  Why is Turbo Tax program is allowing us to add a Traditrional IRA contribution?  

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Accepted Solutions
Phillip1
New Member

Why does Turbo Tax allow us to enter a contribution to a traditional IRA if we contribute to a 401k with our employer

The accountant may be a bit off  (or you may have misunderstood each other). You can contribute to an IRA even if you are covered by a retirement plan from your employer. However, the amount that you can deduct may be limited by your MAGI. This doesn't prevent you from making a contribution - it reduces the amount that can be deducted.

The income limits for making deductible IRA contributions are found at these two links:

  1. IRA Deduction if You ARE Covered by a Retirement Plan at Work - 2017
  2. IRA Deduction if You Are NOT Covered by a Retirement Plan at Work - 2017 (deduction is limited only if your spouse IS covered by a retirement plan)

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1 Reply
Phillip1
New Member

Why does Turbo Tax allow us to enter a contribution to a traditional IRA if we contribute to a 401k with our employer

The accountant may be a bit off  (or you may have misunderstood each other). You can contribute to an IRA even if you are covered by a retirement plan from your employer. However, the amount that you can deduct may be limited by your MAGI. This doesn't prevent you from making a contribution - it reduces the amount that can be deducted.

The income limits for making deductible IRA contributions are found at these two links:

  1. IRA Deduction if You ARE Covered by a Retirement Plan at Work - 2017
  2. IRA Deduction if You Are NOT Covered by a Retirement Plan at Work - 2017 (deduction is limited only if your spouse IS covered by a retirement plan)
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