Why does my refund go down when I raise IRA contributions

We in the Community could make all sorts of guesses, but it would be much more efficient if you would make multiple passes and write down the amounts from line 16 through 33 on the 1040.

It seems that you are accustomed to running the return on multiple passes (or you would not have noticed the change in refund), so pick a return and take screen shots of those numbers, then change the contribution and take another screenshot.

You should quickly see what is changing; then, come back and ask us about it.

Well 7,000 is the max per person.  You have to enter the contribution under the right spouse and each spouse needs income under their name to make the contribution.  Otherwise it is an excess contribution and you are getting penalized.

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@PissedAgain wrote:

I am filing married. As I increase my traditional IRA contributions my refund grows to the point of $7000. As I increase above that my refund diminishes. Is this a TT flaw not recognizing we're married? Joint income is <80K

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More that $7,000 is an excess contribution subject to penalty.

You are not entering an employer plan contribution as a IRA are you?

The maximum IRA contributions for 2020 is $6,000, or $7,000 if you’re age 50 or older by the end of the year; or your taxable compensation for the year which ever is less.

(Taxable compensation is generally wages that you worked for - W-2 or net self-employed income minus the deductible part of the SE tax, but can include commissions, certain alimony and separate maintenance, and nontaxable combat pay ).

See IRS Pub 590A "What is compensation" for details:
https://www.irs.gov/publications/p590a#en_US_2020_publink1000230355

See this IRS link for Traditional IRA deduction limits when covered by a retirement plan at work.

https://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits