IRA question

[Jerry1]

I was given a package this year. They did not take out 401K contributions from that last check (one year salary). So I was thinking about putting some money into a IRA. Unfortunately, the limits come into play. If I'm considered as being covered by a employer plan, then the limits are much less. However, if I'm not considered covered, I could qualify to deduct an IRA contribution.

Does anyone know how to find out where I stand? Once severed from employment, can I say I'm no longer covered? Or, because I was covered at the beginning of the year, I have to say I'm covered?

The next question would be how much could I contribute. Would I have to limit the IRA contribution to the max less what I already put into the 401K? I haven't done extensive reading/research yet, but I don't see any partial year help coming up with Google searches. Please help me not have to read IRS publications - at least not without some help getting to the right publication/section.

Thanks.

 

[cathy63]

You are considered to be covered by a retirement plan for 2018. Probably the easiest thing to do would be to contact your former employer and ask if you can write a check to maximize your contribution for this year.

Here is the relevant section of the W-2 preparation instructions for employers:

Form W-2, Box 13
The “Retirement plan” indicator in Box 13 shows whether an employee is an active participant in your company’s plan. If this box is checked, it lets the recipient know that depending on their filing status and modified adjusted gross income, they may not be entitled to a full deduction for their traditional IRA contributions. You should check the retirement plan box if an employee was an “active participant” for any part of the year in:

a qualified pension, profit-sharing, or stock-bonus plan under Internal Revenue Code Section 401(a) (including a 401(k) plan).
an annuity plan under IRC Section 403(a).
an annuity contract or custodial account under IRC Section 403(b).
a simplified employee pension (SEP) under IRC Section 408(k).
a SIMPLE retirement account under IRC Section 408(p).
a trust described in IRC Section 501(c)(18).
a plan for federal, state, or local government employees or by an agency or instrumentality thereof (other than a 457(b) plan).

Active participant
Generally, an employee is an active participant if covered by a:

defined contribution plan (for example, a 401(k) plan) for any tax year and is credited with any contributions or forfeitures, or
defined benefit plan for any tax year that the employee is eligible to participate.
Don’t check the retirement plan box if your company only has non-qualified or 457(b) plans.

 

[Jerry1]

You are considered to be covered by a retirement plan for 2018.

Was hoping that wasn't the case.

Probably the easiest thing to do would be to contact your former employer and ask if you can write a check to maximize your contribution for this year.

Tried that, however, once separated from service, all activity ends. Period.

Here is the relevant section of the W-2 preparation instructions for employers:

Thanks.