Turbo Tax asks if we made contributions to a traditional or Roth IRA.
Does it make a difference if we report or don't report our ROTH IRA contributions here? Both my wife contribute, but our contributions are way under the IRS limits.
A traditional IRA contribution might be deducible, a ROTH contribution would not.
your contributions to Roth plus Traditional are limited to $6,000
TurboTax needs to know how much you put into a Roth so you don't put $6,000 also into a Traditional,
and vice versa.
Hello @fanfare
Ok if you only contributed a couple of hundred dollars and if you don't report them here, would that be an issue?
TurboTax needs to know how much you put into a Roth to check against the MAGI limits.
If you know the answer, and you don't qualify for Retirement Savings credit, you don't have to make an entry.
Otherwise, your Roth contribution does not show on your tax return.
Why do you want to avoid entering that amount?
You are not required to report Roth IRA contributions on your tax return.
By including them in Turbotax, you allow the program to perform several important functions:
1. verify that you are eligible to contribute to a Roth IRA (based on your income and other tax situations)
2. verify that your total traditional IRA plus Roth IRA contributions do not exceed your limit (based on your income and other tax situations)
3. Keep track of your Roth IRA contribution basis, which may help you avoid taxes in the future if you withdraw funds from your Roth IRA.
If you can perform these functions on your own, you don't need to enter your Roth contributions into the program.