IRA ROLLOVERS AND DEDUCTIONS: TODAY’S SLOTT REPORT MAILBAG

By Sarah Brenner, JD
Director of Retirement Education

Question:

Hello,

If an individual has a solo 401(k), is this considered a “retirement plan at work” that would limit the deductibility of IRA contributions?

Thanks!

Susan

Answer:

Hi Susan,

Being an active participant in a retirement plan for the year can limit your ability to deduct your traditional IRA contribution, depending on your income. Participating in a solo 401(k) would count as active participation for this purpose.

Question:

Greetings:

First and foremost, I want to thank you for your time and consideration regarding my request for help. Second, regarding my deceased wife’s  IRA (which I inherited), can this be rolled over to a ROTH IRA, understanding I pay the tax? Thank you!

Warm regards,

Mike

Answer:

Hi Mike,

Spouse beneficiaries have options which are not available to nonspouse beneficiaries. You can do a spousal rollover of the IRA you inherited from your wife and then convert that IRA to a Roth IRA. Nonspouse beneficiaries cannot do spousal rollovers and cannot convert an inherited traditional IRA to an inherited Roth IRA.

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