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Turbo Tax is incorrectly telling me my MAGI is too high for IRA deduction

When I input the full $7,000 IRA contribution, Turbo Tax tells me that my "MAGI is $175,448 which puts me over the limit for IRA deductions. To deduct a contribution, you can't have a MAGI over $123,000 while being covered by a retirement plan at work. " My husband and I are married filing jointly. He is covered by a retirement plan at work but I am not. Therefore, the MAGI limit is $193,000, not $123,000. I looked at the W-2 info I entered for myself and the Retirement Plan box is NOT checked yet it appears that Turbo Tax thinks I am covered by a retirement plan at work. I am 58 and my husband is 62. Help!

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Accepted Solutions

Turbo Tax is incorrectly telling me my MAGI is too high for IRA deduction

Since yiu appear to be using the Windows desktop version, switch to the forms mode and view the "IRA Contributions Worksheet" line 10.  

 

Are the covered by retirement  plan boxes checked for both spouses?

 


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.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

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8 Replies
KrisD15
Employee Tax Expert

Turbo Tax is incorrectly telling me my MAGI is too high for IRA deduction

Please  make sure you are reporting the IRA contribution for the correct taxpayer, you and not your husband. 

Also you might want to delete and re-enter your W-2, especially if you had imported it. 

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Turbo Tax is incorrectly telling me my MAGI is too high for IRA deduction

Thank you for the reply. I have already checked 3 times to make sure I've marked myself as the correct taxpayer. I thought about re-entering the W-2 info. I did not import it, just entered it manually. I guess I will try that. 

Turbo Tax is incorrectly telling me my MAGI is too high for IRA deduction

Since yiu appear to be using the Windows desktop version, switch to the forms mode and view the "IRA Contributions Worksheet" line 10.  

 

Are the covered by retirement  plan boxes checked for both spouses?

 


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.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

Turbo Tax is incorrectly telling me my MAGI is too high for IRA deduction

Ok, I deleted and re-entered my W-2 info. I'm still getting the same message that my MAGI is too high. Could this be a glitch with the software? (As opposed to something I've entered wrong.)

Turbo Tax is incorrectly telling me my MAGI is too high for IRA deduction

See my comment above. 

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

Turbo Tax is incorrectly telling me my MAGI is too high for IRA deduction

Thank you for your reply. I switched to Forms view. Yes, on the IRA Contrib Worksheet the boxes for retirement plan are check for BOTH spouses. 

 

Box 13 on just SPOUSE'S W2 is checked. 

Box 12 on just SPOUSE'S W2 has a D.

I answered "yes" to "are you covered by ret plan at work" just for SPOUSE.

Neither of us has a self-employed ret plan. 

 

According to the IRS website, if I am NOT covered by a plan at work and I am married filing jointly with a spouse who IS covered by a plan at work, I can deduct the full $7,000 if our MAGI is $193,000 or less, which it is. So I don't understand why TT isn't letting me do the deduction. 

Turbo Tax is incorrectly telling me my MAGI is too high for IRA deduction

Ok, I figured out the problem! I had originally entered a SEP IRA contribution of $10,000 but then found out I couldn't do it so I thought I had deleted it. When I went to Forms view, I found that it was still there so I deleted the form and that fixed the problem. Would never have figured that out if I hadn't gone to Forms view, so thank you very much for that suggestion! 

Turbo Tax is incorrectly telling me my MAGI is too high for IRA deduction

Glad you figure it out.   - Yes the forms mode can tell you a lot when trouble shooting.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
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