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TurboTax says not eligible for traditional IRA deduction, but MAGI is under the IRS limit

TurboTax "Retirement Savings" says that "You can still contribute up to $16,000 to an IRA, but because of your income, you're not eligible to take a deduction this year."

 

But Form 1040, Line 11 shows a number that is definitely less than $230,000. The "Mod AGI Wks" shows that same number.

 

The IRS says that "If your filing status is married filing jointly with a spouse who is covered by a retirement plan at work and your modified AGI is $230,000 or less, then you can take a full deduction up to the amount of your contribution limit"

 

This is the case here. Filter has no W-2 income, spouse who is covered by a retirement plan does. But in past years, TurboTax recognized that the full spousal IRA contribution to a traditional IRA was deductible.

 

I can't understand why TurboTax claims the income is too high to deduct the IRA contribution. There's no number above $230,000 anywhere on Form 1040.

 

I opened the "IRA Contrib Wks" and scrolled below line 13. There's a link to an "IRA Deduction Worksheet". 

That worksheet describes the $240,000 limit for the deductibility of traditional IRA contributions, so I would think that getting TurboTax to use it would make it recognize the contribution as deductible. 

 

But I can't enter anything in the "IRA Deduction Worksheet". I can't even check the box to indicate that the spouse is covered by a retirement plan at work. 

 

Help?

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1 Reply

TurboTax says not eligible for traditional IRA deduction, but MAGI is under the IRS limit

I think the claim of not being eligible was just a side effect of that TurboTax return somehow getting messed up. When I started the state return, it failed to transfer any of the W-2 information, not even the taxpayers' names.

I quit the program and started a new return, and this time it successfully applied the IRA deduction and transferred everything to the state return. Time consuming and frustrating, but at least now I have made progress.

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