You should open and contribute to a Traditional IRA because these contributions are deductible. However, if you or your spouse are covered by an employer sponsored retirement plan, your deduction can be reduced or eliminated based on your modified adjusted gross income and filing status. Please refer to Table 1-2 and Table 1-3 on page
13 of Pub 590A to see if your deduction will be limited.
Please refer to the following IRS
information page for additional clarification about employer sponsored retirement plans. https://www.irs.gov/retirement-plans/are-you-covered-by-an-employers-retirement-plan
When Turbo Tax asks you if you want to make IRA contributions to save money on your taxes, put in the amount that you would be willing to contribute and then Turbo Tax will tell you how much you will save on your taxes.
You can then take that number out and experiment with other amounts and then if you decide that you want to make a contribution, then make sure that you have put the amount in there, that you actually will contribute because Turbo Tax will complete your tax return and file it based on the information that you provide.
If you decide that you do NOT want to make a contribution, then make sure that you take the amount out.
Additional information about Traditional IRAs
- You can make
contributions to a Traditional IRA as long as you have taxable
compensation. If you file married filing jointly, only one spouse needs to
have taxable compensation.
- You can establish
and contribute to a Traditional IRA as long as you were NOT age 70 1/2 by
the end of the year.
- There are
NO modified adjusted gross income limit restrictions for making
Traditional IRA contributions.
