IRA Deduction

LoreeRene — Mon, 15 Feb 2021 19:35:04 GMT

TT won't let me take an IRA deduction for being over AGI and having a retirement plan at work. However I lost that job in June, and none of my jobs since have had a retirement plan. Also I withdrew money from from IRA to help on a home mortgage deposit, and I would like to replace some of it, but again TT won't recognize it due to the above. Any way for me to make this happen in the software?

Re: IRA Deduction

DanaB27 — Mon, 15 Feb 2021 20:06:10 GMT

Please be aware that if you were covered one day by a retirement plan then you are considered to have had one all year.

You can still contribute to the traditional IRA but the amount won't be deductible. Please keep track of the nondeductible amounts since it will be important when you withdraw funds from your traditional IRA later. The distribution amount allocated to the nondeductible contribution will non-taxable.

Pleases enter your contribution into TurboTax and TurboTax will create Form 8606 to track and report the nondeductible contribution. Please see What is IRS Form 8606: Nondeductible IRAs for additional information.

If you returned a distribution from a 1099-R then do not enter this as a contribution to an IRA. Please follow these steps:

Login to your TurboTax Account
Click on the Search box on the top and type “1099-R”
Click on “Jump to 1099-R” and enter your 1099-R
Continue "Tell us if you moved the money through a rollover or conversion" and select "I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days)"
Continue answering the questions.

If you took the distribution because you were directly impacted by the pandemic then please comment if you like more information on how to enter this in TurboTax.

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IRA Deduction

Re: IRA Deduction