Traditional IRA and 401k

[mrsd123]

Our main income has always been and still is from a company that does not have a 401k or any other type of retirement plan.  We are 66 and have always contributed to traditional IRAs and have received full tax benefit.  For 2023, my husband took a small part time job with minimal income in addition to our main employment.  This 2nd job has a 401k and he decided to contribute all of his small income from the 2nd job to it.  Now it appears that we have lost all of the tax benefit of our traditional IRA contributions and our tax responsibility has increased by more that the small wages from the 2nd job.  

The vast majority of our income is from the company with no 401k.  Am I missing something?  It seems not worth it.

[DoninGA]

The deductibility of your IRA contributions are limited based on your filing status and AGI when you have a retirement plan at work.

Go to this IRS website for IRA deductibility when you have a retirement plan at work - https://www.irs.gov/retirement-plans/2023-ira-deduction-limits-effect-of-modified-agi-on-deduction-i...

[mrsd123]

Our main source of income has no retirement plan.  The vast majority of our money comes from a company with NO retirement plan.  It is only a 2nd part time job worked a few weekends out of the entire year with a few hundred dollars of income that has a retirement plan.  Turbo tax is saying that cancels out all of our IRA contributions completely.  Without that 2nd job of a few hundred dollars, Turbo tax says we have full tax advantage of our IRA contributions.  Doesn't sound right.

[DoninGA]

It does not matter that your main source of income is from employment with a company that doe not have a retirement plan.  Since you also have income from a company that does have a retirement plan then your IRA contributions are limited.