Box 14 414H Retirement Contribution -

[Avallora]

The Turbo Tax Program seems to believe I can still contribute $6,000 towards a Traditional IRA to lower my taxable income. Even though Box 13 Retirement is and I have $4,000 in 414H, can i still contribute to an IRA the full amount? 

I've been struggling to find any articles or guidance here. 

[FangxiaL]

If you are covered by a retirement plan at work, the income limit is based on the filing status:

• Single/HOH:
  • Modified AGI $66,000 or less, full deduction;
  • More than $66,000 but less than $76,000, partial deduction;
  • More than $76,000, no deduction
• MFJ/Qualifying widow(er):
  • $105,000 or less, full deduction
  • More than $105,000 but less than $125,000, a partial deduction;
  • $125,000 or more, no deduction
• MFS
  • Less than $10,000, partial deduction
  • $10,000 or more, no deduction

For more detail, please visit the IRS website.

[FangxiaL]

Here is the IRS website.

[Avallora]

But if you contribute $4,000to a "414H", i'd suspect i'd only have $2k of traditional IRA catchup to get me to the $6k limit. If my Modifed AGI is less than $66,000, i'd be able to take a full deduction on the $2,000 or $6,000?

[FangxiaL]

IRA is different from your pension plan. 

Enter $6,000 in the space for Traditional IRA, you should not have any excess contribution to your IRA account if your income is under the limit.

[Avallora]

Is a 414H a 501c18 Plan? I assume yes because retirement box 13 is checked. Therefore shouldn't my contribution limit to a traditional IRA be less than $6K if i've contributed $4k to the 414H. 

https://www.irs.gov/publications/p590a#en_US_2021_publink[phone number removed

General Limit

For 2021, the most that can be contributed to your traditional IRA is generally the smaller of the following amounts.

• $6,000 ($7,000 if you are age 50 or older).

• Your taxable compensation (defined earlier) for the year.

Note.

 

This limit is reduced by any contributions to a section 501(c)(18) plan (generally, a pension plan created before June 25, 1959, that is funded entirely by employee contributions).

This is the most that can be contributed regardless of whether the contributions are to one or more traditional IRAs or whether all or part of the contributions are nondeductible. (See Nondeductible Contributions, later.) Qualified reservist repayments don’t affect this limit.

Examples.

 

George, who is 34 years old and single, earns $24,000 in 2021. His IRA contributions for 2021 are limited to $6,000.

 

[AmyC]

No, a 414h is a retirement plan for government employees while a 501c18 is for union employees. Many people have a retirement plan at work. The only thing stopping people from investing in IRAs, is the income limitation.  If you earned more than $6k and less than the limitations in the chart above, you can claim a $6k deduction for a traditional IRA contribution. You must get it done before the end of tax season, this year, April 18.