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Why does my IRA contribution not decrease my federal tax due? I do not have an employer plan nor am I contributing more than my earned income.

 
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2 Replies
JamesG1
Expert Alumni

Why does my IRA contribution not decrease my federal tax due? I do not have an employer plan nor am I contributing more than my earned income.

Does your modified adjusted gross income exceed the limitations?  See this TurboTax Help.

 

"If you are eligible, you must have adjusted gross income of $64,000 or less for singles, or $103,000 or less for married couples filing jointly."

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dmertz
Level 15

Why does my IRA contribution not decrease my federal tax due? I do not have an employer plan nor am I contributing more than my earned income.

Also, a deduction for an IRA contribution can only reduce income taxes.  If your income tax is already zero, the deduction will not reduce income taxes below zero.  Other taxes such as self-employment taxes cannot be reduced by an IRA deduction.

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