@tovaface wrote:
macuser_22, Thank you for your reply. I read through Pub 590A and now realize that this TT "tax expert" was even more off base than I thought. MAGI is used to determine eligibility to contribute to a Roth. The actual amount is based on the lesser of taxable compensation or the limit of $14,000 (married, filing jointly, both over 50). So given that my MAGI is well below the eligibility limit, the taxable compensation number is what I need.
This I understand to be the sum of 1040 line 1 and line 8. These numbers do not add up to the amount TT said I can contribute to our Roths. It really makes me wonder if there are glitches in TT software in other places.
The most you can contribute to all of your traditional and Roth IRAs is the smaller of:
For 2019 and 2020, $6,000, or $7,000 if you’re age 50 or older by the end of the year; or your taxable compensation for the year.
(Taxable compensation is generally wages that you worked for - W-2 or net self-employed income minus the deducible part of the SE tax, but can include commissions, certain alimony and separate maintenance, and nontaxable combat pay ).
See IRS Pub 590A "What is compensation" for details:
https://www.irs.gov/publications/p590a#en_US_2020_publink1000230355
See this IRS article for Roth contribution limits:
https://www.irs.gov/retirement-plans/roth-iras
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
