topic IRA Deductability in Deductions & credits

IRA Deductability

Lyn64 — Tue, 06 Apr 2021 15:33:55 GMT

I have earned income and am covered by a plan at work. Is my unemployed spouse eligible for an IRA contribution deduction since we are Married filing jointly?

Re: IRA Deductability

MinhT1 — Tue, 06 Apr 2021 15:49:08 GMT

If you have earned income but your spouse does not, she can contribute to a Spousal IRA based on your earned income.

Please read this IRS document for more information.

However, as you are covered by a retirement plan at work, your spouse's deduction may be limited by your combined MAGI.

Please read this IRS document for more information.

Re: IRA Deductability

Lyn64 — Tue, 06 Apr 2021 17:01:05 GMT

It appears we are in excess of the MAGI since I am covered by a 401K, but Turbo Tax is allowing the deduction.

Re: IRA Deductability

MinhT1 — Tue, 06 Apr 2021 17:22:48 GMT

If you are covered by a 401(k) at work, your form W-2 must be checked in box 13 for retirement plans.

Please verify that you have properly entered that check mark when entering your form W-2. This is how TurboTax knows that you are covered at work.

Re: IRA Deductability

Lyn64 — Tue, 06 Apr 2021 17:28:59 GMT

Thanks! I verified Box 13 is checked on my W-2.

Re: IRA Deductability

BillM223 — Tue, 06 Apr 2021 21:36:27 GMT

So you are saying that you don't think the IRA deduction should be allowed because your MAGI is too large?

What is your MAGI (not your regular AGI from the 1040, but the MAGI are seen on worksheet 1-1 in IRS Pub 590-A.)?

Re: IRA Deductability

Critter-3 — Tue, 06 Apr 2021 22:13:45 GMT

You can always make an IRA contribution if you have enough earned income between both spouses but the deductibility of the contribution is the question ... save a PDF of the return to see the worksheet for the calculation of the deduction or form 8606 if you choose to make it non deductible.

Re: IRA Deductability

Lyn64 — Thu, 08 Apr 2021 01:57:12 GMT

MAGI is $170k