IRA deduction

Forum|Forum|5 years ago
February 16, 2021
8 replies
48 views

Turbo tax denied my IRA deduction for me and my husband. When I click on the why, it says no w-2 box 1 income. Although we are retired, box 1 on the import shows way more income than the 14K I am attempting to claim as a deductible IRA (for me and my husband) I chatted with a Turbo tax representative who said possibly your AGI is too high to allow this deduction. So I went to the IRS web site, and basically it says if you are under a certain age (which we both are) , and are not covered by a plan you can contribute to a traditional IRA.

Help please! [email address removed]

VolvoGirl

Level 15

Box 1 on the import of what? Do you have a W2? You said you are retired. You need earned income from W2 wages or a Net Profit from self employment.

rnagardner3265Author

Level 2

Sorry, box one of my husband's w-2. Again, he is retired but has w-2 income. Box 1 and box 11 match (non qualified plans.) We have deducted a traditional IRA for the last 7 years of his retirement in the same situation (not covered by a retirement plan, box 1 and box 11 match) and this year Turbo says its not deductible. Did I check an incorrect answer somewhere?

dmertz

Level 15

Deferred compensation is not compensation that can be used to support an IRA contribution. The IRS treats as supporting compensation on a W-2 the amount in box 1 minus the amount in box 11. Since both of these boxes show the same value, no IRA contribution can be based on this income.

Any IRA contributions that you already made based on the mistaken belief that this income would support the contributions are excess contributions subject to penalty unless distributed by an explicit return of contribution (not a regular distribution) by the due date of your tax return from any IRAs to which these contributions were made.