View Full Version : IRA Contributions with a 401K
genemats
Jul 16, 2012, 02:47 PM
Hello, I was employed with a company with 401K plan for one month in January. I don't have the exact figures, but the most I contributed to the 401K plan was $200-$300.
I left the company in February. Can I contribute anything to IRA for the 11 months I was not covered by any 401K?
ScottGem
Jul 16, 2012, 02:52 PM
Even if you were covered by a 401(k) you can contribute to an IRA.
AtlantaTaxExpert
Jul 16, 2012, 03:37 PM
What Scott says is true, IF your income is low enough.
If your annual income exceeds certain limits, then the IRA option is NOT avaiable to you.
newacct
Jul 18, 2012, 12:04 PM
To add, there are different types of IRAs: Traditional IRA and Roth IRA.
There is no income limit to contribute to a Traditional IRA; but if you were covered by a 401k then there is an income limit to *deduct* a Traditional IRA. (Deducting them is most of the point of a Traditional IRA though. Non-deductible Traditional IRAs are pretty much only good for converting to Roth IRAs.)
Roth IRAs are not affected by 401ks. Roth IRAs do have a (much higher) income limit for contributions in general, but it can be easily circumvented by a backdoor Roth IRA (contributing to a non-deductible Traditional IRA and then immediately converting to a Roth IRA).