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Traditional IRA contribution to reduce adjusted gross income

acdeleeuw — Wed, 31 Mar 2021 20:08:44 GMT

I am doing my 2020 federal taxes. Currently my AGI is $178,302. I worked and contributed to a 401k retirement plan during the first 3 months of 2020. I retired on 3/31/2020. During those 3 months of employment I earned $38985.99 in wages and contributed $1850.50 to a designated Roth under a 401k plan.

I am interested in making traditional IRA contribution to reduce my AGI. I am under the impression that I can make such a contribution of $0.00 up to $7,000.00 before April 15, 2021 and can apply that to the 2020 tax year.

If that is true, where do I specifically enter that contribution amount? I am using Turbo Tax Deluxe.

Re: Traditional IRA contribution to reduce adjusted gross income

DanaB27 — Wed, 31 Mar 2021 20:27:36 GMT

It seems as if your modified adjusted gross income (MAGI) might be over the limit and your contribution will be nondeductible. You still can contribute up to $7,000 for 2020 but it will not be deductible/ lower your AGI if your MAGI is over the limit. This year you have time to make contributions until May 17 (IRS).

The deduction of a traditional IRA may be limited if you or your spouse is covered by a retirement plan at work and your income exceeds certain levels. Pease see IRA deduction limits for details.

Re: Traditional IRA contribution to reduce adjusted gross income

acdeleeuw — Sat, 10 Apr 2021 17:35:18 GMT

Is there anything that I can do the reduced AGI?

Re: Traditional IRA contribution to reduce adjusted gross income

HelenC12 — Mon, 12 Apr 2021 15:58:12 GMT

It's hard to come up with adjustments after the year has ended. One would have been to harvest or take investment losses.

Below is a list of adjustments to income on form Schedule 1 (Form 1040):

Educator expenses,
Certain business expenses of reservists, performing artists, and fee-basis government officials.
Health savings account deduction,
Moving expenses for members of the Armed Forces,
Deductible part of self-employment tax,
Self-employed SEP, SIMPLE, and qualified plans,
Self-employed health insurance deduction,
Penalty on early withdrawal of savings,
Alimony paid,
IRA deduction,
Student loan interest deduction,
Tuition and fees deduction.