traditional IRA plus 401?

[scubaeyes]

What is the name of your state? CT

I have a traditional IRA, and a job where I receive W-2 income. This year I started to freelance as a consultant, in addition to my job. The consultation income is 1099 income.
If I start a 401k for my 1099 income, may I still contribute to my traditional IRA from my w-2 income? I have no employer sponsored plan at my job.
Thanks.

 

[FlyingRon]

What is the name of your state? CT

I have a traditional IRA, and a job where I receive W-2 income. This year I started to freelance as a consultant, in addition to my job. The consultation income is 1099 income.
If I start a 401k for my 1099 income, may I still contribute to my traditional IRA from my w-2 income? I have no employer sponsored plan at my job.
Thanks.

I think you misspoke. Presumably your 401k is for the W-2 job and you want an IRA to cover your 1099 income. Yes you can do that, provided you aren't bumping into the IRA salary limits.

 

[efflandt]

If you start something like a SIMPLE 401(k) for your own business, it may affect the amount of regular IRA contributions that are deductable. Another option may be an SEP-IRA, which may allow socking away more tax deferred, but would also likely affect deductability of contributions to a regular IRA.

If eligible for a Roth IRA, that may be a better option than non-deductable contributions to a regular IRA, and simpler to account for (contributions are after-tax, but distribution of contributions or "qualified" gains are never taxed and never subject to required minimum distribution).

http://www.irs.gov/retirement/article/0,,id=111419,00.html is basic info about SEP-IRA or http://www.irs.gov/retirement/article/0,,id=119612,00.html is info about setting up a 401(k).