Whether or not you can make a Deductible IRA Contribution depends on your Modified Adjusted Gross Income (MAGI), your filing status, and whether or not you are "covered" by an Employer-Sponsored Retirement Plan (Retirement Plan Box Checked on Line 13 of your Form W2).
If you are unmarried and you are not covered by an Employer Sponsored Retirement Plan, you can make a Deductible IRA Contribution no matter what your MAGI. [If you are Married Filing Joint and you are not covered by an Employer Sponsored Retirement Plan but your spouse is, your ability to make a Deductible IRA Contribution phases out when your joint MAGI is between $186,000-$196,000]
If you are covered by an Employer Sponsored Retirement Plan, your ability to make a Deductible IRA Contribution phases out when your MAGI hits certain levels based on your filing status:
- Married Filing Joint or Qualified Widow: Phases out between $99,000-$119,000
- Single or Head of Household: Phases out between $62,000-$72,000
- Married Filing Separate: Phases out between $0 - $10,000. (Married individuals who live apart at all times during the year are treated as Single).
If you meet all of the qualifications discussed above, and TurboTax is still showing that you are not eligible for a Deductible IRA Contribution, please comment below so that I can assist you further.
If you are able to make a Deductible Traditional IRA Contribution, it will definitely reduce your tax liability and the amount you owe. If eligible, you have until 4/17/18 to make the contribution for 2017.
