How to calculate MAGI to determine if eligible to contribute to ROTH this year?

[arusso03]

Married filing jointly and AGI = $232K, but $115K of that is due to a Roth conversion.  I believe MAGI is used to determine Roth eligibility (as opposed to AGI) and I also believe that Roth conversions are deducted from AGI to determine MAGI for Roth eligibility.  If true, then we would be below the $189K cut-off and I presume we could each contribute $6500 (we're over 65) to a Roth IRA this year.  Is this correct?  Unfortunately, we already filed our return through TurboTax and can't get back to that section. Thk u!

[AnnetteB · Accepted solution]

You are correct that any Roth conversion amounts are subtracted from the AGI to determine the MAGI for Roth contribution purposes. 

Use the following link to see the full calculation of the MAGI, see the table on page 40:  https://www.irs.gov/pub/irs-pdf/p590a.pdf

[marciem]

I'm having this issue.  For some reason Turbotax is including the conversion funds in our MAGI and disallowing the deductablity  of my traditional  IRA contribution. Any tips on how to exclude the Traditional to Roth IRA conversion funds from MAGI for IRA contribution deduction limits?

[DianeC958]

Please review the section in TurboTax under Deductions and Credit>IRA Contributions.  

The program does exclude the conversion of the IRA to a Roth IRA when calculating the possible deduction for a contribution to an IRA account.

TurboTax follows the calculation that is on page 40 of Publication 590-A.

Link to Pub 590-A

@marciem

[cyclinguybill]

This is great information.  I also had a big conversion this year and was surprised that I qualified for a 2019 Roth contribution.  I was sure Turbo Tax had made a mistake since everything I was seeing online made no mention that conversions were excluded form AGI.  The link to pub 590-A was very helpful and reassuring.  thanks