Did you know that whether or not you are active in an employer retirement plan can impact your ability to deduct a contribution to a traditional IRA? Just to be clear, that doesn’t mean you can’t make a contribution to a traditional IRA–you can do that so long as you have earned income. What I am referring to when I talk about “deductions” are whether or not they can be deducted on your taxes. If you are an “active” participant in an employer plan (most likely a 401(k)) then you will most likely not be able to take a deduction, especially if you make $65,000 or more ($104,000 or more for those married and/or filing jointly). Now, just because you hit those income marks doesn’t mean you automatically ineligible. You may be able to take part of the deduction depending on how much you earn. If you are not a participant in an employer plan, then you can probably take the total deduction on your taxes regardless of how much you make. Of course–before I go any further–if you have questions about your taxes and whether you can take a deduction, I always encourage you to speak with a tax professional as I cannot determine that for you. Now, back to taking the deduction, you may be wondering whether you are an active participant in an employer plan. That can be determined by looking at you W-2 and seeing whether Box 13 (the “retirement plan box”) is checked off. If there is a check, you are an active participant, and if there is no check, you are not participant. It’s really that simple. However, I have a feeling that most people reading this blog know their financials enough to immediately answer whether or not they are participating in an employer plan. So, are you an active participant in your employer plan and do you plan on taking a traditional IRA contribution deduction?