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Level 2
posted Dec 12, 2023 2:13:45 PM

tax deductible IRA

Hello

I lost my job in the middle of the year with 401K contribution not even half of the limit. I did get a severance pay but wonder if I can make a max contribution to a traditional IRA so I can get tax deduction. Thanks

0 2 424
2 Replies
Level 15
Dec 12, 2023 2:25:17 PM

Depending on your Modified AGI and filing status you may be able to contribute to an IRA even if you were covered by a retirement plan at work.

Go to this IRS website for eligibility - https://www.irs.gov/retirement-plans/2023-ira-deduction-limits-effect-of-modified-agi-on-deduction-if-you-are-covered-by-a-retirement-plan-at-work

Level 15
Dec 12, 2023 2:33:18 PM

Unfortunately, even if you lost your job part-way through the year, you are considered "covered" by a workplace plan, and your IRA limits are the ones used by someone who is covered by a workplace plan.