401k and IRA

[asabour]

Can I contribute to a 401k and IRA in the same year and receive tax benefits on both?

Also, the max 401k contribution in 1 year is $14500, is this the total amount allowed (employee+employer) or just the max employee amount allowed (i.e. the amount can go over $14500 if the employer matches more)? Thanks

 

[vi edit]

Yes, you can contribute to both.

The 401k contribution limit is for your share only. Your employer match is exempt.

 

[her209]

Careful though... link

Receiving a Tax Deduction
If you do not participate in an employer-sponsored plan, such as an SEP IRA, SIMPLE IRA or qualified plan, contributions to your Traditional IRA are tax deductible. However, if you participate in either of these plans, you are considered an active participant, and the deductibility of your contributions are determined by your modified adjusted gross income (MAGI) and your tax-filing status, that is, whether you file 'married filing separately', 'married filing jointly' or 'single'. To learn about making IRA contributions while holding active-participant status, see Traditional IRA Deductibility Limits.

 

[spidey07]

There's a big sticky about taxes at the top. A few very qualified individuals can easily answer.

To you second point - I "believe" it is only a limit on your contributions. Don't know for sure.

 

[asabour]

thanks. Also, is the only difference between roth and regular IRA the tax benefit of contributions/withdrawals?

 

[spidey07]

Originally posted by: asabour
thanks. Also, is the only difference between roth and regular IRA the tax benefit of contributions/withdrawals?

In all honesty these types of questions are best defined by your goals.

The differences are very clear-cut. The outcome of your choices is not. Meaning what may sound like a great idea today is not a good choice depending on your goals.