IRA and rolling into a QP

[K-t-F]

How long does an IRA have to be in effect? Here is why I ask....

- Cleint sponsors a 401(K) plan and maxes out

- Client makes an IRA contribution

- Client now wants to roll the IRA into the K plan

What is to prevent the client from doing this every year ... is there a rule that does just that?

[wmyer]

Client CANNOT roll the nondeductible IRA into the 401(k) plan. Only deductible IRAs can currently be rolled into 401(k) plans.

[jevd]

Just because the client is covered by a qualified plan doesn't make the IRA contribution non-deductible. However, if the client is maxing out the 401(k) contribution, it is likely that his AGI is over the limit.

[mbozek]

A married taxpayer can deduct contributions to both a 401K plan and IRA if the AGI does not exceed 65k (04) or 70K (05). Can he afford 16k in contributons in 04? A married employee with 100k in salary and no other taxable income can reduce taxable income for 13k in 401k, 8k for 125/129 plan, 3k each for cap losses, IRA and college tuition.