Unable to Deduct IRA contribution

[avsteele]

I'm getting a notice that I cannot deduct my IRA contribution because of an income limit. This should not apply as neither I nor my spouse are covered at work.

My W-2 does NOT have box 13 checked, nor any field in box 12 filled (neither the actual W-2 nor the one in TT generated). Only I have a W-2, my spouse does not.

I never got any prompt specifically asking me if I or my spouse was covered by a retirement plan and I cannot find where to assert that I am not.

However I note that my spouse does receive 1099-R income from military retirement (non-qualified plan). Is this the problem?

Thanks much

[KrisD15]

The military retirement should have no bearing on your ability to contribute to an IRA. 

Do you have enough earned income to make the contribution? The retirement income cannot be used for the contribution.

If your W-2 was imported, you might delete it and type it in manually. 

Also, look to see if a previous W-2 (perhaps the military W-2 from 2020) is in your list of forms, and if so delete that. 

The program will carry-over information from your 2020 return and may be expecting you to enter that other W-2 as well.

As long as neither of you are covered by a retirement plan and you have enough earned income there should be no limit to your deduction. 

[avsteele]

I confirm there is only a single W-2 in the draft.

I confirm I have more then enough income to allow a deduction

I confirm deleting the W-2 and re-entering has no effect. (It asks for the EIN and wages then imports the rest of the info automatically always without asking me. I verify there is no box 13 or values in box 12.)

I confirm that deleting my wife's 1099-R has no effect on my ability to get a deduction. I still get the "income too high " either way.

I never see a screen asking me if I have a work plan when entering the IRA contribution.

I did not have any problem like this last year.

[VolvoGirl]

Try deleting the W2 and enter it Manually.  Make sure the W2 and 1099R are assigned to the right spouse.

Do you have any other income?  Interest, dividends, Social Security etc?  

[avsteele]

Yes, I have other income from 1099-Int/DIV, some K-1's etc... the W-2 and 1099-R are assigned to the correct person.

[VolvoGirl]

Maybe your total income is too high.  Read IRS 590a

https://www.irs.gov/pub/irs-pdf/p590a.pdf 

[avsteele]

UPDATE: I confirm that if I delete My W-2 I get a different screen asking me the total value of my IRA, but then get told I can't contribute because, essentially, "Adam does not have enough earned income:" But without my wages I'm probably below the cap anyway so I'm not sure what this tells us

[avsteele]

There is not supposed to be any cap if you and your spouse are not covered by a plan at work (my situation)

https://www.irs.gov/retirement-plans/2021-ira-deduction-limits-effect-of-modified-agi-on-deduction-i...

[avsteele · Accepted solution]

There appears to have been an erroneous worksheet in my return indicating a SEP IRA. 

https://ttlc.intuit.com/community/retirement/discussion/re-where-do-i-enter-in-turbotax-that-i-am-no...

I was able to fix this issue by deleting the offending sheet using these instructions

https://ttlc.intuit.com/community/retirement/discussion/re-where-do-i-enter-in-turbotax-that-i-am-no...