IRA Contribution Limit Question
Hi,
I live in California.
I have a company 401k which I contribute to automatically through my pay checks. My employer matches.
I also have a traditional IRA and a self-directed IRA which I set up a few months ago using funds from an old 401K that I had from a previous employer.
My question is – can I contribute money to one of or both of these IRA’s this year? If so how much can I contribute and is that effected by how much I have contributed to my current employer 401K?
Thank you!
KW
Permalink Submitted by Alan - IRA critic on Tue, 2020-06-09 00:35
You can contribute up to 6000 (7000 if age 50+) to a TIRA as long as you have at least that much earned income in 2020. However, since you are a 401k participant, your modified AGI may be too high to deduct the contribution. If you cannot deduct the contribution, you might consider making a Roth IRA contribution, which has a higher income cutoff. The income cutoffs are based on your tax filing status (eg single or MFJ). If your modified AGI is also too high for a Roth contribution, your last remaining option is a non deductible TIRA contribution or saving in a taxable account.