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New Member
posted Apr 15, 2023 4:04:56 PM

IRA contribution deduction limits if ended 401K job

I received a single paycheck from employer in 2022 that made contribution to 403B plan before being terminated. The remainder of year I was self-employed and made contributions to my IRA. Can I deduct those contributions if joint MAGI > $136K? What do I need to do in TurboTax to enable deduction?

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Expert Alumni
Apr 15, 2023 4:39:48 PM

In answering your question, I’m assuming you are filing as married since you mention the $136k limit for deducting a traditional IRA contribution as married filing jointly.

 

There is no proration for being covered by an employer retirement plan. The "Retirement Plan" box in box 13 of your Form W-2 should be checked if you were covered by your employer's plan. This box should be checked even if you weren't vested in the plan, and even if you weren't covered at the end of the year. However, if your employer offers a plan and you don't participate (by making contributions), you're not considered covered by that plan unless it is a defined benefit plan.

 

See Are You Covered by an Employer's Retirement Plan?

 

If you are above the limits for an IRA deduction, you can still make a non-deductible contribution to your traditional IRA.

 

A self-employed person can contributed to a deductible Simplified Employee Pension Plan (SEP). You can set up a SEP for a year as late as the due date (including extensions) of your business income tax return for the year you want to establish the plan.

 

See Simplified Employee Pension Plan (SEP).