Question

We meet the criteria for the max IRA deduction (both over 50) and under AGI limig and TurboTax is saying we don't qualify for a deduction. We did before April 15. Why?

Forum|Forum|6 years ago
May 20, 2020
1 reply
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I filled out our tax info before April 15 and we qualified for the deduction. When I went in to change the amount, after April 15 because of the extension, because we decided we could contribute the max, it says we don't qualify for the IRA deduction.

TurboTax Deluxe Online

macuser_22

Employee

It should tell you the reason - what does it say? Do you have sufficient taxable compensation to be able to contribute?

The maximum IRA contributions for 2019 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 deducible 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_2018_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

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**