Married and filing joinly, my wife is covered under a retirement plan and I am retired receving a pension, can I take deduction for traditional IRA?

[DanielV01 · Accepted solution]

It depends.  Please note this FAQ that describes this subject:  https://ttlc.intuit.com/replies/3301534. 

If your joint income is under 186,000 you could be able to take the credit, but there is an age limit as well.  Please see this IRS website link:  Retirement Topics IRA Contribution Limits | Internal Revenue Service, where you'll see this excerpt:  

IRA contributions after age 70½

You can’t make regular contributions to a traditional IRA in the year you reach 70½ and older. However, you can still contribute to a Roth IRA and make rollover contributions to a Roth or traditional IRA regardless of your age.

As long as your income is under 186,000, and you did not turn 70 1/2 last year, then you are able to take the deduction.

[axelmolly]

Thanks TurboTaxDanielV    Our income for 2017 is under $186,000 and we both are under 70 1/2.    I was terminated the end of Oct. 2016 and received a one year severance, 10 months of which was reported on my 2017 W-2.  In addition I  began receiving my pension the beginning of Dec. 2016 and then the entire year 2017 which was reported on my 2017 1099-R.  Question, box 12a on my 2017 W-2 shows amount of $288. and the letter "D" and Ret. plan is checked.  The $288 was a deferred payment to my 401K plan, which should of been made the end of 2016 before my retirement started in Dec. 2016. Am I able to deduct $6500 contribution to a traditional IRA?    Thanks

[DanielV01]

That code D changes the math unless your company can backdate the 401K contribution to 2016 and re-issue both the 2016 and 2017 Forms w-2 that they issued.  In the same FAQ above, if you both "worked" (remember that your w-2 is considered wages) and "participated" in a company pension (the code D is a 401K contribution), then the limitation for fully deducting an IRA contribution is 99,000 of modified adjusted gross income, not 186,000. So if your income is higher than 99,000, you will want to see if the company can backdate the contribution and reissue corrected w-2s.  If they can't, then your option is to leave the contributions as nondeductible traditional IRA contributions, or speak to your plan administrator to recharacterize the contribution as a Roth contribution, which is also not deductible, but has fewer reporting requirements than does a contribution to a nondeductible Traditional IRA.

[DanielV01]

However, if your income is below the 99,000 mark, you may take the full deduction.