Deductible Iras

[Guest batberf]

During 2002 I worked for two employers. I earned over $3,000 from each. One employer provided a 401k plan; the other had no deferred compensation plan or pension plan. Am I eligible to have a deductible IRA for 2002 (up to $3,000) because my second employer did not cover me under a deferred compensation plan/pension plan?

[Mike Preston]

Not enough information. Take a look at your W-2 from each employer. Do either of them check the box "Pension Plan" in Box 13? If so, if you are single then you can have a fully deductible IRA if your adjusted gross income is less than $34,000. If you are married filing jointly, the adjusted gross income limitation is $54,000 for a fully deductible IRA. If you are married filing separately, you can't.

In both these cases, if your adjusted gross income is between the amount indicated and $10,000 above the amount indicated, you can have a deductible IRA, but it is phased out (but not below $200). For example, if you are single and have AGI of $39,000 you could have a deductible IRA of $1,500.

If neither of your W-2's have the box checked, then you can have a deductible IRA of up to $3,000.

Note that I'm assuming your employers have properly filled out your W-2 (not always a correct assumption when looking at the pension plan indicator in Box 13).

Were you born on 12/31/1952 or before? If so, the $3,000 is increased to $3,500.