My wife has an IRA that we have not been able to make tax-deductible, contributions to in the past because I was working for the federal government, contributing to my federal retirement, and our income exceeded the threshold.
My wife and I are now retired, drawing money from my federal annuity, and SS.
Are we able to contribute to her IRA and deduct the contribution?
You are only eligible to contribute to an IRA if you have compensation from employment, generally income reported in box 1 of a W-2 (minus any amount in box 11) or net earnings from self-employment. Social Security and annuity income are not compensation.
It depends. Your ability to deduct an IRA contribution in part or in full depends on how much you earn, whether you or your spouse are currently contributing to other qualified retirement plans, and what type of IRA you have.
I have a similar question. I am retired, have a Federal pension but also worked this past year. My gross annuity was $112K but only earned $4.8K. In 2020 I did not contribute an employee retirement plan but am unsure whether my annuity payment disqualifies me for a tax break in 2020. Please advise- Turbotax asks the right question, I just don't know the right answer for my circumstances. Thank you! T
If don't have a W-2 that has box 13 Retirement plan marked and you made no self-employed retirement contributions, you are not an active participant in a workplace retirement plan and a traditional IRA contribution will be deductible.
march4666, your IRA contribution is limited to your compensation. Your pension payments are not compensation.
TurboTax will automatically determine if any of the amount that you enter is an IRA contribution is an excess contribution and will automatically determine the amount that is deductible.
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