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Returning Member
posted Feb 23, 2025 7:12:50 AM

spousal ira zero deduction

AGI 235 - filing jointly.  

Spouse did get a small W2 this year for a part time job of a couple thousand. 
Previous years I was able to add 6000 to spousal ira for a deduction. 

This year, no matter how hard i try - TT say's zero deduction allowed.  It does recommend i reduce to 3820 which is fine. ( i usually make a single payment in this first quarter of the new year)

But every time i go through the form it nets a zero deduction. 

 

Is there a list of things i can check that I filled out properly to allow for this deduction or is there a a cap b/c my AGI is too high? what am i missing?

0 4 2329
1 Best answer
Employee Tax Expert
Feb 23, 2025 7:52:19 AM

The retirement plan box on your spouse's W-2 should be checked if her employer has a 401-K plan that she is eligible to participate in, even if she chose not to, and even if she is part-time. You may need to re-enter the W-2 to get it to populate properly after you delete the retirement plan box entry.

 

Your contribution amount may be limited by your income since she is technically a participant in a retirement plan. You can learn more in this IRS article. 

 

4 Replies
Employee Tax Expert
Feb 23, 2025 7:30:48 AM

Two things to check - first, look at your spouse's W-2 to see if the retirement plan box is checked in box 13.  If so, that means there is coverage by a retirement plan and the income limits will be reduced based on the Modified Adjusted Gross Income (MAGI).  Second, even if your spouse is not covered by a retirement plan at work, your MAGI seems to be too high to claim a fully deductible contribution based on the number you show in the question above.

 

See the following information from the IRS to learn more.  Click the appropriate link based on retirement plan coverage for you and your spouse:

 

IRA deduction limits
 

Returning Member
Feb 23, 2025 7:41:09 AM

Interesting.  
Retirement Plan did have an X - I removed it but TT still has zero deduction. 
1. is there a spot where the retirement plan x from W2 was cache'd in TT not letting it show greater than a zero. 

2. should my spouse contact her employer to ask why they selected X if in fact there is no retirement plan offered that she took part of.  Note: they do offer a 401k but she denied it because its just a part time thing. 

Employee Tax Expert
Feb 23, 2025 7:52:19 AM

The retirement plan box on your spouse's W-2 should be checked if her employer has a 401-K plan that she is eligible to participate in, even if she chose not to, and even if she is part-time. You may need to re-enter the W-2 to get it to populate properly after you delete the retirement plan box entry.

 

Your contribution amount may be limited by your income since she is technically a participant in a retirement plan. You can learn more in this IRS article. 

 

Level 15
Feb 23, 2025 8:19:19 AM

Box 13 Retirement plan is only to be marked if additions were made to the employees retirement account for the plan year ending with or within the individual's tax year.  Simply being eligible to contribute does not constitute being an active participant as long as no such additions are made and box 13 Retirement plan should not be marked.

 

Additions are employee contributions, employer contributions and amounts added as a result of forfeitures by other plan participants due to vesting failures.