Are IRAs and 401ks different?

brittanycurnow — Sat, 01 Jun 2019 02:55:23 GMT

I have a Roth 401k but I'm not sure if I should enter the information when turbo tax is asking about an IRA.

If TurboTax is asking about an IRA, it is not referring t...

BMcCalpin — Sat, 01 Jun 2019 02:55:25 GMT

If TurboTax is asking about an IRA, it is not referring to 401(k) plans, which are a different animal under different IRS rules.

A 401(k) plan is a qualified employer-established plan through which eligible employees can make tax-deferred contributions.. This type of plan is only because you are employed, and your ability to control how it is invested may be limited.

An IRA (Individual Retirement Account) is a tax-deferred retirement account that is set up by you and a participating financial institution. There is no involvement with your employer, and you can take the IRA with you wherever you go (to some extent, the employer can force you out of a 401(k) when you leave the company).

There are two types of IRAs: Traditional and Roth. They are quite different from each other, although they both belong to you. Look for these keywords when answering questions.

topic Are IRAs and 401ks different? in Retirement tax questions

Are IRAs and 401ks different?

If TurboTax is asking about an IRA, it is not referring t...