Traditional IRA deduction

Forum|Forum|6 years ago
February 27, 2020
1 reply
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After inputting my husband's IRA contribution, TurboTax indicated that he could not deduct the contribution because his MAGI was over $123,000 while being covered by a retirement plan at work. He is not covered by a retirement plan at work. He changed jobs in March to a job that did not have any retirement plan. Shouldn't he be allowed to contribute based on the income earned at the new job that did not have a retirement plan?

Best answer by DaveF1006

No earned income for me, only 1099-R. My husband has 1099-R plus the W-2s.

According to this Turbo Tax link, the IRS considers you covered by an employer's plan if you were covered at any time during the tax year.

JamesG1

Level 15

W-2 box 13 'retirement plan' on just one W-2 on the tax return may limit your ability to get tax incentives for other retirement plans like a traditional IRA.

Please see this TurboTax Best answer.

"Form W-2, Box 13

The “Retirement plan” indicator in Box 13 shows whether an employee is an active participant in your company’s plan. If this box is checked, it lets the recipient know that depending on their filing status and modified adjusted gross income, they may not be entitled to a full deduction for their traditional IRA contributions." See this IRS publication.

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