Can I still have a traditional IRA if I contribute to my 401(k) plan at work?
Yes. Anyone with earned income who is under age 70½ can open and contribute to a traditional IRA. The contribution limit is $5,500 for 2013 ($5,000 for 2012), plus an additional "catch-up" contribution of $1,000 in 2012 and 2013 if you're 50 or older. However, you may not be able to deduct your IRA contributions if you're covered by a 401(k) plan at work. Whether or not you can deduct your IRA contributions depends on your filing status and annual income (adjusted gross income, or AGI). Specifically, for tax year 2013:
|If your filing status is:||Your IRA deduction is reduced if your AGI is between:||Your deduction is eliminated if your AGI is:|
|Single or head of household||$59,000-$69,000||$69,000 or more|
|Married filing jointly or qualifying widow(er)||$95,000-$115,000||$115,000 or more|
|Married filing separately||$0-$10,000||$10,000 or more|
You may also qualify for a partial tax credit for amounts contributed to your traditional IRA or your 401(k) plan.