IRA Deductibility
If a spouse participates in a Non-Qualified Deferred Compensation Plan only, and makes over 500k, and has a non-working spouse, can each person contribute to a tax-deductible Traditional IRA? The mutual fund families I’ve talked to claim the IRS does not distingquish between “Qualified” and “Non-Qualified” retirement plans in its rules for deductibility if one spouse “participates” in a employer sponsored retirement plan. Please advise. Thanks.
Permalink Submitted by Al Fry on Sun, 2007-11-04 20:28
I believe they are incorrect. As of 2006, even IRC Sec. 457 deferred compensation plans were not taken into consideration. I do not believe any changes have happened since (unless the 409A rules added something).