Why is my military pension being used on roth ira max contributions for Married Joint, with W-2 totals of $163K but TurboTax with military puts me over the $199K max?

[Davidrm1]

I am having the same exact problem as the original post trying to file my 2022 taxes.

[DanaB27]

Please review Worksheet 2-1. Modified Adjusted Gross Income for Roth IRA Purposes and note that line 2 on the worksheet only subtracts conversions to Roth IRA from lines 4b and 5b of Form 1040. Therefore, the military retirement distribution will be included in the MAGI to determine if you can make Roth IRA contributions.

Please keep in mind you can only contribute to a Roth IRA if you have taxable compensation (military pension not included) and your modified AGI (military pension included) is less than:

• $214,000 for married filing jointly or qualifying widow(er);
• $144,000 for single, head of household, or married filing separately and you didn’t live with your spouse at any time during the year; and
• $10,000 for married filing separately and you lived with your spouse at any time during the year.

Please see What happens if I made an excess Roth IRA contribution for additional information.

@Davidrm1 

[Davidrm1]

Dana,

Thank you for the response.  I know you provided it before, but I wasn't understanding why.  I am assuming that because it is taxable it is included in the AGI?  We hadn't made the contributions yet as we were unsure if we could go the ROTH route this year.  I guess we will have to go the Traditional route and then convert them.

Thanks again. 

[Jclabat]

See previous posts - a military pension should be on line 5b which is a subtraction from AGI to produce MAGI.  Are you entering your pension in the correct place so it gets captured on 5b (as a 1099-R)?

[DanaB27]

Yes, the military pension will be listed on line 5b.

No, line 5b won't be always subtracted from the AGI to produce the MAGI for Roth IRA purposes. Please review Worksheet 2-1. Modified Adjusted Gross Income for Roth IRA Purposes and note that line 2 on the worksheet only subtracts conversions to Roth IRA on lines 4b and 5b of Form 1040. Therefore, the military retirement distribution will be included in the MAGI to determine if you can make Roth IRA contributions.

@Jclabat