Where is MAGI calc. in TurboTax that includes tax exempt and municipal bond interest income?

[wggubelin]

Understand that tax exempt interest income must be added to MAGI for Roth contribution eligibility.  

[Anonymous_]

If you're using the desktop program you could try the IRA Information Worksheet and the IRA Contributions Worksheet. 

[wggubelin]

Referring to answer above, neither IRA worksheet helps user compute MAGI. I believe TurboTax's MAGI computation to determine an individual's Roth eligibility is inaccurate because it does not include tax exempt nor municipal bond interest.

[Anonymous_]

You might want to contact Support on Monday.

How do I contact TurboTax? (intuit.com)

[Critter-3]

Per the IRS instructions the worksheet in the program is working properly ... tax exempt and municipal bond interest income is not mentioned anywhere ...

 

How Much Can Be Contributed?  Publication 590-A (2022), Contributions to Individual Retirement Arrangements (IRAs) | Internal Reve...

The contribution limit for Roth IRAs generally depends on whether contributions are made only to Roth IRAs or to both traditional IRAs and Roth IRAs.

Worksheet 2-1. Modified Adjusted Gross Income for Roth IRA Purposes

Use this worksheet to figure your modified adjusted gross income for Roth IRA purposes.

1.	Enter your adjusted gross income from Form 1040, 1040-SR, or 1040-NR, line 11	1.	_____
2.	Enter any income resulting from the conversion of an IRA (other than a Roth IRA) to a Roth IRA (included on Form 1040, 1040-SR, or 1040-NR, line 4b) and a rollover from a qualified retirement plan to a Roth IRA (included on Form 1040, 1040-SR, or 1040-NR, line 5b)	2.	_____
3.	Subtract line 2 from line 1	3.	_____
4.	Enter any traditional IRA deduction from Schedule 1 (Form 1040), line 20	4.	_____
5.	Enter any student loan interest deduction from Schedule 1 (Form 1040), line 21	5.	_____
6.	Enter any foreign earned income exclusion and/or housing exclusion from Form 2555, line 45	6.	_____
7.	Enter any foreign housing deduction from Form 2555, line 50	7.	_____
8.	Enter any excludable qualified savings bond interest from Form 8815, line 14	8.	_____
9.	Enter any excluded employer-provided adoption benefits from Form 8839, line 28	9.	_____
10.	Add the amounts on lines 3 through 9	10.	_____
11.	Enter: $214,000 if married filing jointly or qualifying surviving spouse, $10,000 if married filing separately and you lived with your spouse at any time during the year, or $144,000 for all others	11.	_____
	Is the amount on line 10 more than the amount on line 11? If “Yes,” see the Note below. If “No,” the amount on line 10 is your modified adjusted gross income for Roth IRA purposes.
	Note. If the amount on line 10 is more than the amount on line 11 and you have other income or loss items, such as social security income or passive activity losses, that are subject to AGI-based phaseouts, you can refigure your AGI solely for the purpose of figuring your modified AGI for Roth IRA purposes. (If you receive social security benefits, use Worksheet 1 in Appendix B to refigure your AGI.) Then, go to line 3 above in this Worksheet 2-1 to refigure your modified AGI. If you don’t have other income or loss items subject to AGI-based phaseouts, your modified adjusted gross income for Roth IRA purposes is the amount on line 10 above.

[Mike9241]

did you read what is just below line 11 on the worksheet?

[SteamTrain]

@wggubelin 

The actual IRS worksheet for MAGI used for ROTH Contributions is on worksheet 2-1:

Publication 590-A (2022), Contributions to Individual Retirement Arrangements (IRAs) | Internal Reve...

________
From what I can see in that IRS worksheet, the MAGI does not include tax-exempt income from Municipal bonds (line 2a on the form 1040).  A bunch of other stuff can affect it though.

_______

Other alternate MAGI's, for other purposes, do include tax-exempt interest/dividends, but apparently not this one, unless I'm missing something.

@dmertz    Correct?

[wggubelin]

Appreciate responses. Have reviewed worksheet from IRS publication 590-A and agree it does not include municipal bond interest. But there is evidence (see below) that suggests this worksheet computes MAGI differently then other IRS/government programs. Are there different MAGI calculations dependent on type of government program?

Following is from Healthcare.gov......

Your MAGI is the total of the following for each member of your household who’s required to file a tax return:

• Your adjusted gross income on your federal tax return
• Excluded foreign income
• Nontaxable Social Security benefits (including tier 1 railroad retirement benefits)
• Tax-exempt interest
• MAGI does not include Supplemental Security Income (SSI)

Schwab also has an article that cites MAGI includes municipal bond interest.

Not Always Tax-Free: 7 Municipal Bond Tax Traps

Charles Schwab

https://www.schwab.com › learn › story › not-always-t...

[VolvoGirl]

Yes there are different MAGI for different  things.  

[dmertz]

SteamTrain is correct, tax exempt income is not added to AGI when calculating the MAGI for the purpose of a Roth IRA contribution.  SteamTrain provided the link to the worksheet for calculation the MAGI for the purpose of a Roth IRA contribution.

The MAGI from Healthcare.gov is for the purpose of determining Premium Tax Credits and has nothing to do with Roth IRA contributions.  There are dozens of different ways to modify AGI for different purposes.