Deduction update

The Personal Finance section of the Daily Herald/ USA Today recently featured a story on the five myths of 401(k) investing. The second item said the IRS allows savings "twofers as well as the ultimate tax savings triumvirate - contributing to a 401(k), Roth or Traditional IRA as long as you follow contribution and deduction limits."

Although this was true up until a few years ago, changes were made which now add a very tricky caveat.

If your employer offers a retirement plan/pension plan, noted in box 13 of your W-2, you may not take a tax deductible Traditional IRA. You may contribute to a Roth or Traditional IRA, but none of it is tax deductible.

Richard Francke

Bartlett