I recieved a form 5498 that states I contributed $250.00. When I entered this on Turbo Tax it said I was not allowed to make this contribution. Why would I not be allowed?

[rschule1]

Hi There:

Assuming all information has been inputted correctly, it appears as if you have run into a limitation such as  income exceeding the maximum amount or earned income not meeting the minimum amount. I'd recommend logging into Turbo Tax and click "Talk to Expert". We will be able to review your entries and answer your questions. 

[Katherine S 63]

Great question!!!

There could be a few reasons.  

1. Do you have a 401K or 403B at your work?  

2. If you do, was your income over the limit?

https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras#:~:text=How%20much%20can%2....

Within this above link is this link:

https://www.irs.gov/retirement-plans/ira-deduction-limits

Modified AGI limit for traditional IRA contributions. For 2022, if you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is:

• More than $109,000 but less than $129,000 for a married couple filing a joint return or a qualifying surviving spouse,

• More than $68,000 but less than $78,000 for a single individual or head of household, or

• Less than $10,000 for a married individual filing a separate return.

• If you are limited, then it is best to pull that investment out.  It is not advise to keep track of nondeductible contributions.

• How do I remove excess contributions from my IRA?
  If you've contributed too much to your IRA for a given year, you'll need to contact your bank or investment company to request the withdrawal of the excess IRA contributions. Depending on when you discover the excess, you may be able to remove the excess IRA contributions and avoid penalty taxes.

  I sure hope this has been helpful.

  If you reply back, I will try to keep an eye open to assist further.

  Please give me a thumbs up if this was helpful.

  Katie S.

[MercieD1]

The 5498 is a form that shows what you contributed to an IRA.  There may be a number of reasons why you are not allowed to make this contribution:

1. You contributed to another IRA and have already passed the limit.  The limit is $6,000 ($7,000 if you're 50 or older)

2. You had no taxable compensation.  The limit is your taxable compensation for the year if it is less than $6,000 ($7,000 if you're 50 or older)

3. You're covered by a plan at work (check your W2 for that) and your income exceeds a certain level

The IRS has a chart that shows the limits if you're covered at work  IRS - Contribution Limits if covered by a retirement plan at work