topic I'm over 59-1/2 and still working. If I withdraw $6500 from my traditional IRA in January, can I still make a tax deductible IRA contribution of $6500 that same tax year? in Retirement tax questions

I'm over 59-1/2 and still working. If I withdraw $6500 from my traditional IRA in January, can I still make a tax deductible IRA contribution of $6500 that same tax year?

dennykc — Thu, 06 Jun 2019 13:22:55 GMT

Assume: Contribution would be done after the 60 day loan repayment window.

Assume: I am otherwise allowed to may a $6500 deductible IRA contribution.

What exactly are you trying to accomplish by taking it ou...

fanfare — Thu, 06 Jun 2019 13:22:56 GMT

What exactly are you trying to accomplish by taking it out, and then putting it back in ??

Sounds like OP needs a temporary loan.

SweetieJean — Thu, 06 Jun 2019 13:22:58 GMT

Sounds like OP needs a temporary loan.

Yes, as long as you qualify to do so. Are you covered by...

SweetieJean — Thu, 06 Jun 2019 13:22:59 GMT

Yes, as long as you qualify to do so. Are you covered by a retirement plan at work?

A 401K retirement plan is available at work, but I no lon...

dennykc — Thu, 06 Jun 2019 13:23:01 GMT

A 401K retirement plan is available at work, but I no longer contribute.

For a 401(k) plan, The individual is an active participa...

SweetieJean — Thu, 06 Jun 2019 13:23:02 GMT

For a 401(k) plan,

The individual is an active participant if the individual elects to defer compensation (make salary deferral contributions) to the plan. If the individual is eligible to make salary deferral contributions, but declines to make such salary deferral contributions for a year (and no other contributions or forfeitures are allocated to such individual's account for the plan year ending with or within the individual's taxable year), the individual is not an active participant for that year.

So, I am not an active participant in a 401K. Does this a...

dennykc — Thu, 06 Jun 2019 13:23:04 GMT

So, I am not an active participant in a 401K. Does this affect my ability to contribute to my IRA?

It just affects your ability to deduct those contribution...

SweetieJean — Thu, 06 Jun 2019 13:23:05 GMT

It just affects your ability to deduct those contributions. But that doesn't matter since you don't participate. But I have to ask, are you over age 70.5?

Also see: https://pocketsense.com/can-ira-deduction-same-year-took-withdrawal-5790.html">https://pocketsense.com/can-ira-deduction-same-year-took-withdrawal-5790.html</a>

It does not matter if you contribute to the 401(k) or not...

macuser_22 — Thu, 06 Jun 2019 13:23:08 GMT

It does not matter if you contribute to the 401(k) or not if you employer contributed to it then you would still be a participant. Box 13 on your W-2 will be checked if you have a 401(k). That does not prevent you from contributing to a Traditional IRA, it only affects your ability to deduct it if your income exceeds the limits given in this link to the IRS: <a rel="nofollow" target="_blank" href="https://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits">https://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits</a>

You must also have at least as much taxable compensation (money that you worked for) as your IRA contribution.