MAGI calculation for ROTH Contribution

[kkmrhktax]

Thank you. Sorry I was on the wrong thread. I didn't understand the interview question. I followed your input and the Roth MAGI is correct.  I confirmed that Form 8606 Part II line 16 and 18 show the conversion taxable amount. I should have experimented with different answers for the interview questions.

[shmc]

This issue has now been solved for both IRA deduction and ROTH contribution.

[dmertz]

I see that it has been fixed for making a Roth IRA contribution, but not for deducting a traditional IRA contribution.

[shmc]

hmmm , in my file it is showing the correct MAGI now when making a deductible IRA contribution. I have a test file with a before and after and the MAGI did change.

[dmertz]

My test file contains a $200,000 distribution from an inherited traditional IRA, resulting in a total income on Form 1040 line 9 of $272,590, but the MAGI shown on line 12 of the IRA Deduction Worksheet is only $72,590 (instead of $272,590), allowing the IRA contribution to be deductible on Schedule 1.

[shmc]

sounds like there's more to the problem.

I had a $10K inherited IRA distribution as a non-spouse beneficiary of someone who died before 2017. (code 4 on the 1099R)

(if I was the spouse, I could claim the it as my own IRA but that's not the case)

The MAGI is now correctly showing $10K more than before.

I am not covered by a retirement plan.

so, I don't know.

[dmertz]

"I am not covered by a retirement plan."

If neither you nor your spouse is covered by a workplace retirement plan, there is no MAGI limit for being able to deduct a traditional IRA contribution.  My test file includes a W-2 showing enough compensation ($50,000) to support an IRA contribution and has box 13 Retirement plan marked.

[shmc]

my test file also has a W-2 with $50K (for the primary), I checked both ways... with and without box 13 checked and it is calculating the MAGI and deductible IRA contribution amount correctly in both cases if the primary taxpayer is making the IRA contribution. With box 13 checked the deduction is limited.

your example seems very straightforward, mine has all sorts of stuff going on like conversions, distributions, annuities, etc. and it looks right. the inherited IRA distribution is for the spouse.

it doesn't seem like the program should care who the inherited IRA distribution belongs to.

maybe Turbotax needs another problem ticket submitted.

[dmertz]

The problem appears only if the Taxable IRA Distribution Worksheet is present.  If this worksheet is not present, the correct MAGI is shown on line 12 of the IRA Deduction Worksheet.