Nondeductible IRA contribution

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I was self-employed 2021 and have not worked for an employer with a retirement plan for over 4 years.  Every year my husband and I contribute the maximum to a traditional IRA.  Our income has always been low (my husband's self-employment income is nearly always below the amount we contribute to his IRA).  This year, for the first time, TurboTax is saying that portions of our 2021 IRA contributions are non-deductible because our earned income was not enough.  In researching this question, I have read that if you have No retirement plan at work: Your deduction is allowed in full if you (and your spouse, if you are married) aren’t covered by a retirement plan at work.

Does the fact that I once worked for a company that offered a retirement plan limit the deduction of myself and my husband?  In other words, do I need to answer the TurboTax question of whether I am "covered by a retirement plan at work" to the affirmative?  Regardless, I answered that I didn't have a retirement plan at work and TurboTax is saying that we over-contributed to our IRAs.

Hope you can help clarify this for me!

Thanks,

Beth

[ErnieS0 · Accepted solution]

Your IRA contributions are probably limited by your husband's total self-employment income. Your joint contributions can't be more than your husband's net self-employment income.

The retirement plan question only applies when you are covered by a plan in the current tax year (2021) and your income is above a certain level. If your husband's income is below the IRA contribution amount, you are well below that limit.