deductible IRA contribution

Forum|Forum|5 years ago
February 26, 2021
1 reply
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I keep getting an advice message in TT that I am able to make a deductible IRA contribution yet cannot find anywhere where I can determine how TT is reaching that conclusion. I have no earned income so I do not believe I should be able to make an IRA contribution. I think there may be a bug in the software. How do I determine TT's logic. Thank you.

Opus 17

Level 15

What are the sources of your income?

Note that there is a recent tax law change that certain graduate and post-graduate fellowships count as "compensation" for IRA eligibility, even though they are still "unearned income" for all other purposes. Are you a graduate student or post-doc?

cjobAuthor

Level 5

I have a deferred comp distribution and investment income (cap gains/interest/dividends). Oh, and all of $400 as an election worker. So unless something changed with the deferred comp distribution qualifications.... But then I should be over any MAGI threshhold. Would love to see that TT found something I missed but I'm not comfortable the program is right yet.

Opus 17

Level 15

If your deferred compensation is subject to social security tax (it's included in box 3 income even though it is excluded from box 1 income) that counts as compensation for the IRA. But I'm not sure about the MAGI.

@macuser_22 @dmertz any comments?