topic Self employed and made a contribution of 6,000 however the system is disallowing it. I have earned income over 6,000 so I am not sure why it's not allowing it to flow. in Retirement tax questions

Self employed and made a contribution of 6,000 however the system is disallowing it. I have earned income over 6,000 so I am not sure why it's not allowing it to flow.

keishan1234 — Tue, 05 Jan 2021 15:46:24 GMT

the amount is not flowing on the IRA contribution line under schedule 1

Re: Self employed and made a contribution of 6,000 however the system is disallowing it. I have earned income over 6,000 so I am not sure why it's not allowing it to flow.

macuser_22 — Tue, 05 Jan 2021 15:54:39 GMT

If you had exactally $6,000 of *net* self-employed income (after expenses) then the most that could be used for and IRA contribution would be about $5,500. The deductible portion of the SE tax (15.3% of net) must be subtracted.

The most you can contribute to all of your traditional and Roth IRAs is the smaller of:

For 2019 and 2020, $6,000, or $7,000 if you’re age 50 or older by the end of the year; or
your taxable compensation for the year.

(Taxable compensation is generally wages that you worked for - W-2 or net self-employed income minus the deducible part of the SE tax, but can include commissions, certain alimony and separate maintenance, and nontaxable combat pay ).

See IRS Pub 590A "What is compensation" for details:
https://www.irs.gov/publications/p590a#en_US_2018_publink1000230355

See this IRS article for Roth contribution limits:

https://www.irs.gov/retirement-plans/roth-iras

Re: Self employed and made a contribution of 6,000 however the system is disallowing it. I have earned income over 6,000 so I am not sure why it's not allowing it to flow.

keishan1234 — Tue, 05 Jan 2021 16:42:14 GMT

I have over 6K earned income. I entered income on schedule C but when I go to enter in information for IRA it disallows it.

Re: Self employed and made a contribution of 6,000 however the system is disallowing it. I have earned income over 6,000 so I am not sure why it's not allowing it to flow.

dmertz — Tue, 05 Jan 2021 16:51:58 GMT

Is TurboTax indicating that it's an excess contribution or just that it's a nondeductible contribution. Either situation would cause it to not be present on Schedule 1 as a deduction.

If it's not an excess contribution, it would be nondeductible if you were covered by a workplace retirement plan (including a self-employed retirement plan) and your modified AGI for the purpose is above the threshold based on your filing status.

Examine the IRA Deduction Worksheet ("IRA Worksheet" in the forms list).

Re: Self employed and made a contribution of 6,000 however the system is disallowing it. I have earned income over 6,000 so I am not sure why it's not allowing it to flow.

keishan1234 — Tue, 05 Jan 2021 16:58:23 GMT

It says I am not permitted to contribute more than the amount of your earned income. Your traditional IRA contribution of 6K is more than your earned income of zero. Which is incorrect.

Earned income is well over 6K. It seems as if they are not recognizing the net self employed income.

Re: Self employed and made a contribution of 6,000 however the system is disallowing it. I have earned income over 6,000 so I am not sure why it's not allowing it to flow.

dmertz — Tue, 05 Jan 2021 18:10:49 GMT

Net earnings are net profit calculated on Schedule C minus the deductible portion of self-employment taxes. If you have made deductible contributions to a self-employed retirement plan, present on Schedule 1 line 15, these also reduce compensation available to contribute to an IRA. Finally, excluded foreign-earned income is not income that will support an IRA contribution.

Re: Self employed and made a contribution of 6,000 however the system is disallowing it. I have earned income over 6,000 so I am not sure why it's not allowing it to flow.

macuser_22 — Tue, 05 Jan 2021 18:24:22 GMT

For your self-employed income view the 1040 Schedule 1 line 3 minus line 14.

Re: Self employed and made a contribution of 6,000 however the system is disallowing it. I have earned income over 6,000 so I am not sure why it's not allowing it to flow.

keishan1234 — Tue, 05 Jan 2021 19:32:00 GMT

my self employed income is over the threshold when I subtract the business income from the deductible SE tax. But there is no amount flowing to line 19 on Schedule 1. There is no amount on line 15 bc it was not an SEP , SIMPLe plan. It was a traditional IRA which should be reflected on Line 19. Unless I am missing something.

Re: Self employed and made a contribution of 6,000 however the system is disallowing it. I have earned income over 6,000 so I am not sure why it's not allowing it to flow.

keishan1234 — Tue, 05 Jan 2021 19:34:08 GMT

Is there someone I can speak to over the phone to walk me through where to enter int he information. As I would like to resolve this as everything is entered correctly.

Re: Self employed and made a contribution of 6,000 however the system is disallowing it. I have earned income over 6,000 so I am not sure why it's not allowing it to flow.

VolvoGirl — Tue, 05 Jan 2021 19:40:35 GMT

Are you married? Maybe the schedule C and IRA contribution is listed under different spouses?

Re: Self employed and made a contribution of 6,000 however the system is disallowing it. I have earned income over 6,000 so I am not sure why it's not allowing it to flow.

macuser_22 — Tue, 05 Jan 2021 19:40:42 GMT

Look at the "IRA Contribution Worksheet" lines 12 & 13 and then the "IRA Deduction Worksheet" to see why.

Re: Self employed and made a contribution of 6,000 however the system is disallowing it. I have earned income over 6,000 so I am not sure why it's not allowing it to flow.

keishan1234 — Tue, 05 Jan 2021 19:41:55 GMT

I looked at this schedule in great detail and it presents no solution. The amounts are not flowing.

Re: Self employed and made a contribution of 6,000 however the system is disallowing it. I have earned income over 6,000 so I am not sure why it's not allowing it to flow.

keishan1234 — Tue, 05 Jan 2021 19:47:55 GMT

is there someone I can speak to

Re: Self employed and made a contribution of 6,000 however the system is disallowing it. I have earned income over 6,000 so I am not sure why it's not allowing it to flow.

VolvoGirl — Tue, 05 Jan 2021 19:48:45 GMT

Contact Customer Service
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https://support.turbotax.intuit.com/contact/

What is the Turbo Tax phone number
https://ttlc.intuit.com/community/using-turbotax/help/what-is-the-turbotax-phone-number/00/25632