dmertz
Level 15

Retirement tax questions

TurboTax is performing the same calculation as is done on Worksheet 2-2 of IRS Pub 590-A.

 

I had to go back and read Sections 408A and 219 of the tax code to confirm this, but if your supporting compensation is less than the overall Roth IRA contribution limit, it is indeed correct that your contribution limit is based on a proportion of compensation rather than a proportion of the overall contribution limit.  See line 6 of Worksheet 2-2:

https://www.irs.gov/publications/p590a#en_US_2025_publink1000231016

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