Personal Finance & Money Asked by BCO on July 14, 2021
I’m working on filing my 2020 taxes (married filing jointly) and realized that I will owe about $5000 due to reducing 401k contributions last year.
I researched and found that it may be possible for me to open a traditional IRA and contribute up to $6000 before the filing deadline and deduct it, except that my AGI is too high.
The primary earner in my household is my spouse and I have been considering quitting my job anyway, so I am wondering:
If I quit my job, will I qualify to deduct traditional IRA contributions on by 2020 tax return since I will no longer have an employer sponsored 401k?
No. Whether you are "covered by a retirement plan at work" (which affects Traditional IRA deductibility) is determined by the "retirement plan" checkbox in Box 13 of your 2020 W-2(s). That would not change now if you stopped contributing to your 401(k). For that matter, if you've already contributed in 2021, you're considered covered for this year as well. More info from the IRS here.
Correct answer by Craig W on July 14, 2021
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