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New Member
posted Feb 26, 2024 5:47:06 PM

Traditional IRA and 401k

I stopped contributing to my 401K Oct 2023. Can I still contribute to a traditional IRA to lower my taxable income? I've read that if you have a 401k there are income limits at which I cannot contribute to an IRA. I am above that limit but thought since I had 3 months in 2023 of not contributing to the 401K there might be a loophole. 

0 4 460
4 Replies
Expert Alumni
Feb 26, 2024 5:58:37 PM

No,

although you stopped contributing, you would still be considered as having an employer retirement plan, so the income limit would be applied. 

New Member
Feb 26, 2024 9:37:25 PM

Thank you for your reply. I forgot to include that I rolled my 401K to a IRA brokerage account. Does that make any difference?

Expert Alumni
Feb 27, 2024 5:04:15 AM

No, you are considered to be covered by an employer retirement plan for 2023 and therefore the Traditional IRA deduction limits apply. You can still make the traditional IRA contributions but they might not be deductible depending on your Modified AGI.

 

Please see IRS Are You Covered by an Employer's Retirement Plan? for additional information.

Level 15
Feb 27, 2024 5:53:59 AM

You can contribute to the traditional IRA, but if box 13 Retirement plan is marked on your 2023 W-2, your modified AGI for the purpose will determine how much of the regular IRA contribution made for 2023 you are eligible to deduct.