Turbotax, we have a problem-spousal IRA

Forum|Forum|1 year ago
February 20, 2025
1 reply
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In 2023 I made $6000 and the limit I could deposit to my IRA was $7500. My husband had plenty of earned income so he contributed to my IRA which I have read on IRS.gov is perfectly fine as long as we file jointly. This year same situation except I am putting in the limit of $8000. This year however turbotax is telling me I am contributing too much and it won't recognize my full contribution. Please either tell me what changed (nothing) or fix your software that I paid over $100 for. Thankyou!

DanaB27

Level 15

To clarify, is this a Roth IRA or a traditional IRA?

Please note contribution to a Roth IRA may be limited based on your filing status and income. Please see Amount of Roth IRA Contributions You Can Make for 2024. If this is the case you would have an excess contribution. Please see What happens if I made an excess Roth IRA contribution.

Also, the deduction may be limited if you or your spouse is covered by a retirement plan at work and your income exceeds certain levels. Please see IRA deduction limits for details. If you are getting the warning that your income is too high to deduct it then you can make the contribution but the contribution will be nondeductible.

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lfoss55Author

Level 2

Sorry but none of that is my problem. This is a traditional IRA in my name I work very little at a part time job so basically a non working spouse. My income was $7010 but since I am over 50 I am able to contribute $8000 total. My husband retired last year but still had $1793(bonus) in earned income of which $990 is to be put into my IRA account. His w-2 was marked retirement plan but due to his retirement early in the year and no company funds were put into his 401k he wasn't truly covered and he will be requesting a corrected w-2. The problem is the IRS says I can contribute my $7010 and my husband can contribute the extra $990 because we file MFJ and have the combined earned income to cover it but your turbotax, while it allowed this just fine in 2023, is not allowing it in 2024 and keeps insisting I can only contribute $7010. AND BTW, I have not found any place in your software (Home and Business) that even mentions a non working spousal IRA contribution.

The fact that you, and expert, don't know this is even more disappointing. Get back to me when you fix your glitch.

dmertz

Level 15

The rules state that the combined earned income of both parties can be used to calculate the maximum contribution and it can then go into one or other or both IRAs.

Some of the answers above are incorrect. Also, TT has a bug that affects the IRA calculator which stops it from following the rules.

"The rules state that the combined earned income of both parties can be used to calculate the maximum contribution and it can then go into one or other or both IRAs."

No, that's not what the tax code says. Only the spouse with the lower compensation is permitted to make a spousal contribution supported by the the other spouse's compensation. That's explicit in tax code section 219(c)(2)(B). The spouse with the higher compensation is not permitted to use any of the compensation of the lower-compensated spouse to support the higher-compensated spouse's contribution. Also, to make a spousal contribution the spouses must file jointly.

TurboTax calculates the permissible contribution amounts correctly.