IRA deduction

[pjwagners]

My spouse had a 401k for the first 3 months of 2021. After that we have been contributing to a traditional IRA with the understanding that we would be able to deduct that amount from our AGI. Our return is complete but we were not given a deduction. Our total income is less than the range shown below. What am I missing?

The phase out amount according to Turbotax help says: 

If you weren't covered by another retirement plan at work, but your spouse was, and you're:

• Filing jointly: the phase-out range is $198,000 – $208,000

[macuser_22]

IRA's are *individual* - there is no "we".   It is either your IRA or your spouses IRA.

The phase out amount are different depending which spouse owns the IRA and had the 501(k) plan.

If your joint AGI is $125,000 or more your spouse cannot deduct, if you were not covered by an 401K at work then if your AGI is $208, 000 or more then you cannot deduct.

https://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits

[pjwagners]

Okay, that's what I thought, but the turbotax 1040 isn't offering a deduction despite meeting the requirement. I am not covered, AGI is <208K. 

[macuser_22]

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@pjwagners wrote:

Okay, that's what I thought, but the turbotax 1040 isn't offering a deduction despite meeting the requirement. I am not covered, AGI is <208K. 

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I tried it and it worked fine.  The IRA contribution interview should tell you on the last screen why it is not deductible, what does it say?

[pjwagners]

It says: If you (or your spouse) are covered by a retirement plan at work, and your modified adjusted gross income (AGI) is above a certain amount, then you can't deduct part or all of your contribution. 

Under "learn more" it says, You can't deduct any of your contribution if your modified AGI is:
- $125,000 or more, and you're married filing jointly or a qualifying widow(er)

*The limits are higher if you are married filing jointly and you are not covered by a retirement plan at work, but your spouse is covered.*

I fit this criteria (not covered but spouse is) and MAGI is under the limit given for that category.

[macuser_22 · Accepted solution]

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@pjwagners wrote:

It says: If you (or your spouse) are covered by a retirement plan at work, and your modified adjusted gross income (AGI) is above a certain amount, then you can't deduct part or all of your contribution. 

Under "learn more" it says, You can't deduct any of your contribution if your modified AGI is:
- $125,000 or more, and you're married filing jointly or a qualifying widow(er)

*The limits are higher if you are married filing jointly and you are not covered by a retirement plan at work, but your spouse is covered.*

I fit this criteria (not covered but spouse is) and MAGI is under the limit given for that category.

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Covered by a retirement plan at work is usually indicated by box 13 on your W-2.

Make sure the W-2 (s) were entered for the correct spouse.

  Make sure that the IRA contribution is for the correct spouse.

Check your W-2 box 12 also.

TurboTax makes that determination if any of the following are true:

1) Box 13 (retirement plan) on your (or spouses) W-2 is checked,
2) Box 12 on your (or spouses) W-2 contains codes D, E, F, S, or AA/
3) You answered “yes” to the “Are you covered by a Retirement Plan at work” in the interview.
4) You have a self-employed retirement plan.

If none of those  apply to you then delete the 1099-R's and delete the "IRA Worksheet" and re-enter.

[pjwagners]

Found the problem. One of the w-2s carried over from last year was assigned to the wrong person. Once I deleted and re-entered it, it all worked. 

Thanks for your help!