topic Re: IRA Deduction in Retirement tax questions

IRA Deduction

bnigh — Wed, 07 Apr 2021 20:42:50 GMT

Married filing Jointly.

Wife's employer offers SimpleIRA and she contributed ~$6k.

I started 2020 employed, 401k was offered, but was laid off in April, contribution ~$6k.

Are we eligible to deduct an IRA or Roth IRA contribution?

Re: IRA Deduction

ThomasM125 — Wed, 07 Apr 2021 21:20:35 GMT

It would depend on your income and your age. Your wife could not if she is under the age of 50, as the contribution limit is $6,000, otherwise she may be able contribute up to $1,000.

You may be able to contribute up to $6,000 if under age 50, or $7,000 if older, but your income may affect your ability to contribute, as may your wife's affect her ability to contribute.

The best thing to do is decide how much you want to contribute and enter that contribution in TurboTax to see if the program allows it.

Re: IRA Deduction

bnigh — Wed, 07 Apr 2021 21:24:35 GMT

Thanks

My wife and I are both over 50 yrs old.

Since I access to a 401k until 4/20, am I considered as having a 401k available or not?

Re: IRA Deduction

macuser_22 — Wed, 07 Apr 2021 21:28:07 GMT

Only if new contributions were made.

Covered by a retirement plan at work is usually indicated by box 13 on your W-2.

TurboTax makes that determination if any of the following are true:

1) Box 13 (retirement plan) on your (or spouses) W-2 is checked,
2) Box 12 on your (or spouses) W-2 contains codes D, E, F, S, or AA/
3) You answered “yes” to the “Are you covered by a Retirement Plan at work” in the interview.
4) You have a self-employed retirement plan.

Re: IRA Deduction

ThomasM125 — Wed, 07 Apr 2021 21:32:17 GMT

The 401(k) plan was available to you to make contributions during the time you earned your income during the year, unless you took another job after you got laid off. So, you would be considered to have a retirement plan at work as it applies to limiting your deductible contribution based on your income.