Traditional IRA contribution to reduce adjusted gross income

[acdeleeuw]

I am doing my 2020 federal taxes.  Currently my AGI is $178,302.  I worked and contributed to a 401k retirement plan during the first 3 months of 2020.  I retired on 3/31/2020.  During those 3 months of employment I earned $38985.99 in wages and contributed $1850.50 to a designated Roth under a 401k plan.

I am interested in making traditional IRA contribution to reduce my AGI.  I am under the impression that I can make such a contribution of $0.00 up to $7,000.00 before April 15, 2021 and can apply that to the 2020 tax year.

If that is true, where do I specifically enter that contribution amount?  I am using Turbo Tax Deluxe. 

[DanaB27 · Accepted solution]

It seems as if your modified adjusted gross income (MAGI) might be over the limit and your contribution will be nondeductible. You still can contribute up to $7,000 for 2020 but it will not be deductible/ lower your AGI if your MAGI is over the limit. This year you have time to make contributions until May 17 (IRS).

The deduction of a traditional IRA may be limited if you or your spouse is covered by a retirement plan at work and your income exceeds certain levels. Pease see IRA deduction limits for details.

[acdeleeuw]

Is there anything that I can do the reduced AGI?

[HelenC12]

It's hard to come up with adjustments after the year has ended. One would have been to harvest or take investment losses.

Below is a list of adjustments to income on form Schedule 1 (Form 1040):

• Educator expenses, 
• Certain business expenses of reservists, performing artists, and fee-basis government officials.
• Health savings account deduction,
• Moving expenses for members of the Armed Forces,
• Deductible part of self-employment tax,
• Self-employed SEP, SIMPLE, and qualified plans,
• Self-employed health insurance deduction,
• Penalty on early withdrawal of savings, 
• Alimony paid,
• IRA deduction, 
• Student loan interest deduction,
• Tuition and fees deduction.