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emc011075
emc011075, Tax adviser
Category: Tax
Satisfied Customers: 2320
Experience:  IRS licensed Enrolled Agent and tax instructor
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Both my husband 68 and I 67 retired this year. has a 401K

Customer Question

Both my husband 68 and I 67 retired this year. Don has a 401K thru his employer that he contributed thru 020115. He received pay thru 083115 but no further 401K contributions were allowed during this period. Can he still open an IRA and make a tax deductable contribution for 2015 since he did have some contributions go into his 401k.
I am similar only I worked until 031515, had a 401k thru work. Can I still contribute to an IRA to get the tax deduction for 2015.
Submitted: 1 year ago.
Category: Tax
Expert:  emc011075 replied 1 year ago.

Hi. My name is ***** ***** I will be happy to help you.

There are two things to consider. Eligibility to contribute and eligibility to deduct the contribution.

You are both eligible to contribute up to $6,500 until 70.5 as long as you have earned income (job or self-employment income).

Now if the contribution will be deductible or not depends on your AGI - your total income. Because you were both covered at work you cannot deduct the contribution if your income is over 118K. Between 98K and 118K you will be allowed partial deduction.

https://www.irs.gov/Retirement-Plans/2015-IRA-Deduction-Limits-Effect-of-Modified-AGI-on-Deduction-if-You-Are-Covered-by-a-Retirement-Plan-at-Work

Even if you cannot deduct it you can still make a nondeductible contribution. It means that the nondeductible portion will be distributed to you tax free. You will not have to pay tax again.

Expert:  emc011075 replied 1 year ago.

I see you read my respond. Do you have any questions? Is there anything else I can help you with today?

And if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.