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TComglw2241
Returning Member

Deductions and 401K

I have maxed out my itemized deductions -- $10K maximum for 2019. A message came up inside Turbo tax that suggested I establish a 401K and contribute to it before the July 15 filing date. Will contributions to a 401K plan be deductible even though I have maxed out my "itemized deductions"? 

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2 Replies

Deductions and 401K

I think you are confusing an IRA with a 401(k).

 

Contributions to a Traditional IRA can be deductible unless you have a detriment plan at work and yiur MAGI exceeds the deduction limits.    You can contribute to a IRA for 2019 before the July 15 due date for a deduction.

The maximum IRA contributions for 2019 is $6,000, or $7,000 if you’re age 50 or older by the end of the year; or your taxable compensation for the year which ever is less.

(Taxable compensation is generally wages that you worked for - W-2 or net self-employed income minus the deducible part of the SE tax, but can include commissions, certain alimony and separate maintenance, and nontaxable combat pay ).

See IRS Pub 590A "What is compensation" for details:
https://www.irs.gov/publications/p590a#en_US_2018_publink1000230355

See this IRS link for Traditional IRA deduction limits when covered by a retirement plan at work.

https://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits

 

 

 

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
TComglw2241
Returning Member

Deductions and 401K

Thank's for the two links and the quick response.

A related question: Can I access the tax-saving hints that TT generated? I'm asking if these hints/suggestions can recalled when I open the file again later.

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