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cgbelknap
New Member

Where can i determine if I can make a roth ira contribution?

 
7 Replies
DanaB27
Expert Alumni

Where can i determine if I can make a roth ira contribution?

Roth IRA contribution may be limited based on your filing status and income.

 

You can enter the maximum contribution for 2020:

  • $6,000 ($7,000 if you're age 50 or older),
  • or if less, your taxable compensation for the year

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:

  1. Login to your TurboTax Account 
  2. Click on the Search box on the top and type “IRA contributions”
  3. Click on “Jump to IRA contributions"
  4. To delete repeat steps above and deselect the IRA and confirm you want to delete it.

 

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:

  • Student loan interest
  • One-half of self-employment tax
  • Qualified tuition expenses
  • Tuition and fees deduction
  • Passive loss or passive income
  • IRA contributions
  • Non-taxable social security payments
  • The exclusion for income from U.S. savings bonds
  • Foreign earned income exclusion
  • Foreign housing exclusion or deduction
  • The exclusion under 137 for adoption expenses
  • Rental losses
  • Any overall loss from a publicly traded partnership

You find your AGI on line 11 of the 2020 Form 1040:

  1. Click on "Tax Tools" in the left menu
  2. Click "Tools"
  3. Click "View Tax Summary" in the Tool Center window
  4. Click on "Preview my 1040" on the left

 

 

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DD58
New Member

Where can i determine if I can make a roth ira contribution?

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?

MarilynG1
Expert Alumni

Where can i determine if I can make a roth ira contribution?

@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.

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dmertz
Level 15

Where can i determine if I can make a roth ira contribution?

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.

BryanKirsten
Level 1

Where can i determine if I can make a roth ira contribution?

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?

 

BryanKirsten
Level 1

Where can i determine if I can make a roth ira contribution?

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?

 

SamS1
Expert Alumni

Where can i determine if I can make a roth ira contribution?

Do you have earned income?  Are you covered by a plan at work?  For purposes of the IRA deduction phaseout, MAGI equals:

  • Adjusted Gross Income without taking into account any IRA deduction, plus the sum of the following
  • Student loan interest deduction
  • Tuition and fees deduction
  • Foreign earned income exclusion
  • Foreign housing exclusion or deduction
  • Excluded U.S. Savings Bond interest, used for education.
  • Excluded employer-provided adoption benefits.

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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