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Roth IRA contribution may be limited based on your filing status and income.
You can enter the maximum contribution for 2020:
into TurboTax and see if you will get an excess contribution warning. If you do then go back and delete the entry.
To enter Contributions:
If you are over the limit then you might want to look at this option: How do I enter a backdoor Roth IRA conversion?
Or you can look at these limits and calculate your modified adjusted gross income (MAGI) and see if you can contribute to a Roth:
To calculate your modified adjusted gross income (MAGI), take your (adjusted gross income) AGI and add back certain deductions:
You find your AGI on line 11 of the 2020 Form 1040:
IRS publication 590-A appears to reduce the AGI by the amount of IRA conversions to Roth IRA in figuring the MAGI for the Roth contribution that can be made (table 2-1). The Turbotax program appears not to take this into account. the 590-A I am using is for 2019 returns, and I can't find an updated one for 2020. Did the MAGI calculation change from 2019 to 2020?
@DD58 No, the MAGI calculation for a Roth conversion did not change from 2019 to 2020. You are correct that your AGI is reduced by the amount of the IRA conversion to Roth IRA.
Per @dmertz:
"Your MAGI for the purpose of a Roth IRA contribution is less than your AGI because the calculation of this MAGI involves subtracting from AGI the amount of any Roth conversions from a traditional IRA or rollovers from a traditional account in a qualified retirement plan to a Roth IRA."
Click this link for more info on AGI for Roth Conversions.
DD58, TurboTax indeed does this modification.
There is one area where people sometimes have a misunderstanding. For the purpose of a Roth IRA contribution, AGI is not reduced by the amount of an In-plan Roth Rollover (IRR) in a qualified retirement plan like a 401(k). A designated Roth account in a qualified retirement plan that receives such a rollover is not a Roth IRA and the transaction is not a Roth conversion as defined in the tax code. AGI is only reduced by amounts converted into a Roth IRA.
Turbo tax isn't adding back my non taxable social security disability income in the determination of my deductible IRA. Why? I thought you were supposed to take AGI and add back any ira contribution and any non taxable SS benefits. Can someone explain?
Turbo tax isn't adding back my non taxable social security disability income in the determination of my deductible IRA. Why? I thought you were supposed to take AGI and add back any ira contribution and any non taxable SS benefits. Can someone explain?
Do you have earned income? Are you covered by a plan at work? For purposes of the IRA deduction phaseout, MAGI equals:
There is no reference to excluded SS benefits. There is a special calculation for Social Security recipients that have: 1. earned income 2. are covered by a retirement plan at there work.
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