Hello,
I'd like to contribute the maximum for 2021 for a traditional IRA for both my wife and me, so $6,000 each. We did Roth contributions in past years, but we exceeded the income limit this year in order to do that.
Unfortunately, after entering the max contribution into TT (so $12,000), it is saying none of it is deductible since I had a retirement account with my employer last year as cited on my W-2, combined with income limits which otherwise wouldn't be an issue if there was no employer retirement account.
Here is my situation about that employer account:
- For much of last year I was unemployed (more like furloughed) with no income from my employment, due to continued COVID impacts on my tourism industry
- During that time, not only did I receive no income, but there were obviously no contributions by me or the employer to the 401k account
- Before returning to work in the fall, the account was closed. Note: I am an owner of my small business, so I closed the employer account since the other employee who wanted this retirement benefit left the company.
- Upon returning to work, there was no active 401k account and no contributions.
It would be frustrating if my wife and I couldn't contribute $12,000 to a tax deductible traditional IRA because of an employer 401k account last year that no contributions were made to because I was not actively employed there and that was closed before I rejoined the company. Is there anyway around this?
If not, are there any other ways to contribute to a tax-saving retirement account for 2021?
Thanks,
Tyler
