Why is TT saying I can only deduct $2,032 of my $5k IRA contribution when my total IRA contribution does not exceed $7k nor exceed earned income?

[MindyB]

It sounds like your income may be too high.  IRA contributions are only partially deductible when your Modified Adjust Gross Income (MAGI) falls in a certain range, which depends on your filing status.  For a single, in 2024 that range is $77,000 - $87,000.

For more information and the ranges for all filing statuses, see: Is an IRA contribution deductible?

[jgrigas1]

My income was not that high so I don't understand why the software is saying I'd be penalized.

[VolvoGirl]

How much was your earned income?  What kind of income?   From W2 or a Net Profit on Schedule C for self employment.   If you only have self-employment income you can only contribute up to your net profit reduced by the deduction allowed for one-half of your self-employment taxes then only up to the max IRA limit.