IRA Contributions

[pclark3]

Can you take money from a savings account and make a traditional IRA Contribution to reduce AGI?

The money is not from any retirement fund, annuity or Social Security.

Thank you

[VolvoGirl]

Yes if you have earned income from W2 wages or a Net Profit from self employment.  

[pclark3]

WOW. Thank you that was fast.

I did not earn any money from a W2 this year.

However, the money was earned in prior years, if that make sense.

Thank you

[macuser_22]

It has to be 2020 taxable compensation - W-2 or net self-employed income.    (1040 line 1 and/or schedule 1 line 3 minus line 14 & 15).

[pclark3]

Thank you

Line 1 contains the amount I contributed. 

I should be good correct???

Thank you very much 

[macuser_22]

What income is on line 1 if you had no W-2?

[macuser_22]

Enter the IRA contribution in the interview and the last screen should tell you if you qualify or if it is an excess contribution.

Enter IRA contributions here:
Federal Taxes,
Deductions & Credits,
I’ll choose what I work on (if that screen comes up),
Retirement & Investments,
Traditional & Roth IRA contribution.

OR  Use the "Tools" menu  (if online version under My Account) and then "Search Topics" for "ira contributions" which will take you to the same place.

[pclark3]

We did have a W2 for 2020.

I neglected to tell you that. Apologies.

Having the W2 showing earnings for 2020 is all I needed.

I just needed to be in the guidelines allowed for annual IRA contribution and the W2 needed to have at least that amount.

Thank you very much!!!

[pclark3]

Yep.

I did that, worked great.

I do indeed qualify.

Thank you for your responses.

[macuser_22]

Glad it helped you.