Contribution limits

Client over age 50 participates in 401K plan, total deposits by employee and employer are $ 53,000 + the
$ 6,000 “catch up” for total deposits of $ 59,000.

Is employee eligible to make $ 6,500 non deductible IRA deposit?



Sure thing as long as he’s under 70 1/2. Better yet, if he’s under the income limit how about contributing to a Roth IRA? And if he’s married how about a spousal IRA also?



If he is not under the income limit to deduct the TIRA contribution, he might be under the Roth income limit which is much higher. In that case, his best option would be the Roth IRA. If married and his spouse is NOT an active participant, the spouse’s income limit to deduct a TIRA contribution will be the same as the Roth income limit. If modified AGI is over the Roth limit, then the only IRA option is a non deductible TIRA contribution.



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