Business owner eligible for IRA?
A client is a business owner, and the business has a 401k for its employees. The owner wad removed from the plan to keep it from being top-heavy. Is there anything that would preclude the owner from contributing to a traditional IRA? Would it have mattered either way?
Permalink Submitted by Alan - IRA critic on Tue, 2014-03-11 18:18
Owner could contribute to a traditional IRA in either case, but the contribution may not be deductible. Deduction would depend on the owner’s modified AGI, whether he was considered covered by the 401k at any time during the year and also if married whether spouse was covered by a retirement plan. And for a Roth contribution, his modified AGI would have to be less than the income limit.