401 K and Traditional IRA question

What is the name of your state?Hi
For fiscal 2003 I contributed both 401 k account and a traditional IRA and took a tax deductions for both. Now some friends of mine, told me that I cant do that. Is that correct? I field as an single and box on W2 (wages, tips, other comp) was 38107.96 If I secured up, What are my options now?

Thanks
mukul

ps: I am in ca

[Snipes5]

Your friends are wrong.

If you are single and participate in an "employer plan" (lingo that means the 401K), you may fully fund a traditional IRA if your income is below $40,000. The deductibility is phased out between $40,000 and $50,000.

You are fine for 2003. As for 2004, make sure your 401K contributions push you below that $40,000 mark, and you should once again be good to go.

Note that even if IRA contributions are not deductible, you can still contribute.

Snipes

Thanks a lot
Mukul