Filing jointly we are getting a message from Turbo Tax for me to open an IRA and save $500. I have a 401K plan from my employer and my MAGI is over the limit. So is this an error? My wife does not have an employer sponsored plan so she opened deductible IRA and got the full tax deduction. When i tell turbotax i opened IRA I get 500 tax savings but my IRA is not deductible. This makes no sense. Why nondeductible IRA gives tax savings?
Yes, your deduction might be limited if you are having a retirement account at work please see IRA deduction limits.
Can you please check line 20 on Schedule 1 if the deduction shows correctly? It should only show your wife's full deduction (if your MAGI is less than 198,000).
Where are you seeing the tax savings?
To preview Form 1040:
it shows full deduction for my wife. i am covered by retirement plan at work, what is my MAGI to open deductible IRA for myself?
Use this table as a reference to figure out if your Traditional IRA contribution is deductible: