Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Returning Member
posted Mar 23, 2023 7:52:54 PM

My W2 covers Dec 2021 through Nov 2022 & has 1 contribution to a SIMPLE for Dec 2021. I opted out in Jan 2022. MAGI is > $68K. Can I contribute to a Trad IRA & deduct it?

I work for a small company that closes out the fiscal year at the end of November. I retired on 1/12/22 and did not fill out a new SIMPLE IRA contribution form. I returned to work 45 days later, 3 days per week at half the rate I used to garner so I did not opt back into the IRA and therefore so had no contributions to the SIMPLE IRA in 2022.

0 2 621
2 Replies
Expert Alumni
Mar 23, 2023 8:47:23 PM

Your deduction may be limited because you (and/or your spouse, if you are married) are covered by a retirement plan at work and your income exceeds certain levels.  Because you are over $68,000 your deduction is limited but see IRA Deduction if You ARE Covered by a Retirement Plan at Work - 2022.

Level 15
Mar 23, 2023 10:36:02 PM

SIMPLE IRA plans are calendar-year plans even if the company otherwise uses a fiscal year.  Your contribution in December 2021 therefore makes you covered for 2021, not for 2022.  Your 2022 Form W-2 should have box 13 Retirement plan unmarked if you did not participate at any time in 2022 and the company did not make an optional 2% non-elective contribution for 2022 instead of matching contributions.

 

Being noncovered for 2022 allows you to deduct a permissible traditional IRA contribution without regard to your MAGI.