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New Member
posted Mar 7, 2022 9:47:43 AM

IRA contributions

My wife and I were both fully retired for the first time in 2021. I had been contributing $200.00 per month to a simple IRA account. When I tried to deduct this amount ($2400.00) on my return I got a message that I can no longer claim this deduction because we had 0 "earned Income " for the year. I understand this, however my question is can I return that deduction back to my account, if so how, and going forward can I continue to contribute to my account and not take the deduction in the future?

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1 Replies
Expert Alumni
Mar 7, 2022 10:10:50 AM

Please be aware, you need taxable compensation to be able to make IRA contributions. Please only make IRA contributions in the future if you have taxable compensation.

 

 

For 2022 the total contributions you make each year to all of your traditional IRAs  and Roth IRAs can't be more than:

  • $6,000 ($7,000 if you're age 50 or older), or
  • If less, your taxable compensation for the year 

 

If you did not have any taxable compensation then your contribution will be an excess contribution which is taxed with a 6% penalty as long as the excess stays in the IRA account.

 

To avoid the 6% tax on excess contributions, you must withdraw:

  • the excess contributions from your IRA by the due date of your individual income tax return (including extensions); and
  • any income earned on the excess contribution.

 

Please request the withdrawal of your excess contribution plus earnings with your financial institute. Then enter on the penalty page in TurboTax the amount of contribution you withdrew by the due date.

 

  1. Login to your TurboTax Account 
  2. Click on "Search" on the top right and type “IRA contributions”
  3. Click on “Jump to IRA contributions"

 

[Edited 3/11/2022 | 6:22am PST]

 

@Army24