Traditional IRA contribution to reduce adjusted gross income

Forum|Forum|5 years ago
March 31, 2021
1 reply
1 view

I am doing my 2020 federal taxes. Currently my AGI is $178,302. I worked and contributed to a 401k retirement plan during the first 3 months of 2020. I retired on 3/31/2020. During those 3 months of employment I earned $38985.99 in wages and contributed $1850.50 to a designated Roth under a 401k plan.

I am interested in making traditional IRA contribution to reduce my AGI. I am under the impression that I can make such a contribution of $0.00 up to $7,000.00 before April 15, 2021 and can apply that to the 2020 tax year.

If that is true, where do I specifically enter that contribution amount? I am using Turbo Tax Deluxe.

Best answer by DanaB27

It seems as if your modified adjusted gross income (MAGI) might be over the limit and your contribution will be nondeductible. You still can contribute up to $7,000 for 2020 but it will not be deductible/ lower your AGI if your MAGI is over the limit. This year you have time to make contributions until May 17 (IRS).

The deduction of a traditional IRA may be limited if you or your spouse is covered by a retirement plan at work and your income exceeds certain levels. Pease see IRA deduction limits for details.

DanaB27Answer

Level 15

The deduction of a traditional IRA may be limited if you or your spouse is covered by a retirement plan at work and your income exceeds certain levels. Pease see IRA deduction limits for details.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

acdeleeuwAuthor

Level 2

Is there anything that I can do the reduced AGI?

HelenC12

Level 15

It's hard to come up with adjustments after the year has ended. One would have been to harvest or take investment losses.

Below is a list of adjustments to income on form Schedule 1 (Form 1040):

Educator expenses,
Certain business expenses of reservists, performing artists, and fee-basis government officials.
Health savings account deduction,
Moving expenses for members of the Armed Forces,
Deductible part of self-employment tax,
Self-employed SEP, SIMPLE, and qualified plans,
Self-employed health insurance deduction,
Penalty on early withdrawal of savings,
Alimony paid,
IRA deduction,
Student loan interest deduction,
Tuition and fees deduction.