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Retirement tax questions
Yes, you add back your Traditional IRA deduction to get your MAGI.
As far as why, I am not in charge of the tax code, so I can't explain the reasoning behind it.
My guess would be it is because you can make an IRA contribution after the end of the tax year, while you have to participate in your 401(k) during the tax year to get that deducted from your wages.
In other words, if you didn't have to add back your IRA deduction, people could "fix" a bad outcome on their return by making an IRA contribution in the following year.
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March 16, 2022
2:50 PM