Why does the running tally of my tax liability increase after I plug in an IRA contribution?

[mimart65]

Hello, 

I'm adding hypothetical traditional IRA contributions to determine how much my tax liability (running total) will decrease. Boy was I surprised to see it increase after I plugged in a number?? Why is this happening? 

A similar situation happened when I plugged in a hypothetical HSA contribution amount for my wife's HSA? The tax libility increased??

Is this a software glitch, or am I missing something? Thanks in advance for your help.

[macuser_22]

The only way the tax would go up would be if a penalty was being assessed for an excess contribution if your income does not support a IRA contribution.    The IRA contribution  interview should tell you the reason - what does it say?

[mimart65]

Thanks for your reply. Where do I find the IRA contribution interview?

[macuser_22]

Where are you entering the contribution when the tax goes up, if not the IRA interview?

[mimart65]

I think I misunderstood what you were referring to. I did enter my contribution in the section where I'm asked questions about my IRA. I looked through that ("Learn More") and I don't see any reason given why my contribution would create a tax liability. I removed the hypothetical contribution, went back a few pages and then entered it again. The "tax meter" started again increasing my liability.

[VolvoGirl]

Make sure you are entering the IRA contribution under the right person and that the W2s are assigned to the right spouse.  Maybe one spouse doesn't have enough earned income or all the W2s got assigned to the same spouse.

[mimart65]

Thanks for your suggestion. I've checked and that information was entered correctly. I think I'm going to erase all my entries and start over again.

[macuser_22]

Enter IRA contributions here:
Federal Taxes,
Deductions & Credits,
I’ll choose what I work on (if that screen comes up),
Retirement & Investments,
Traditional & Roth IRA contribution.

OR  Use the "Tools" menu  (if online version under My Account) and then "Search Topics" for "ira contributions" which will take you to the same place.