- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Retirement tax questions
If TurboTax is indicating that your traditional IRA contribution is nondeductible, it is because the information that you have entered to this point indicates that your modified AGI is above the threshold for your filing status for being able to deduct the contribution and you or your spouse is covered by a retirement plan at work. Since you are self employed, that workplace retirement plan would be a SEP, SIMPLE or Keogh plan (including an individual 401(k)). If you had insufficient eligible compensation, TurboTax would instead indicate that your contribution is an excess contribution rather than simply being nondeductible.
See this IRS web page regarding income thresholds: https://www.irs.gov/retirement-plans/ira-deduction-limits
As macuser_22 indicated, net income from self-employment available to support a personal traditional IRA contribution is your net profit from self-employment minus the deductible portion of SE taxes shown on Form 1040 line 27, further reduced by any self-employed retirement contribution shown on Form 1040 line 28.