2024 IRA Deduction Limit Glitch?

Forum|Forum|1 year ago
March 9, 2025
2 replies
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It appears that turbotax is not calculating the IRA deduction correctly. For a married couple, filing jointly, 1 spouse eligible for a retirement plan, with an AGI below $123,000, the full deduction ($7000 or $8000 depending on age) should be eligible, but the program is phasing out the deduction for the retirement eligible spouse as if the AGI is above $123,000.

AnnetteB6

To take a closer look at the situation and try to explain it or determine if there is something that needs the attention of the development team, it would be very helpful to have a diagnostic copy of your tax file. The diagnostic file will not contain personally identifiable information, only numbers related to your tax forms.

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tez15Author

9411826064046511-71753867

tez15Author

I posted the token number but it is showing as phone number removed phone number removed7. Please let me know if you received it, and if not, instructions on how to post it (get it to you). Thank You.

dmertz

Employee

[Disregard this post. I listed the wrong phaseout ranges.]

The $123,000 threshold for deductibility of the traditional IRA contribution only applies to the spouse that is not covered by a workplace retirement plan. The phase-out of the deduction for a traditional IRA contribution made by the spouse who is covered by a workplace retirement plan is a Modified AGI occurs between $77,000 and $87,000.

If the wrong spouse is being subjected to the lower phase-out range, make sure that you have marked the W-2 as belonging to the correct spouse.

tez15Author

That is not how I read the guidance. I am married filing jointly, the limits you listed are for a single filer with a retirement plan. I cut and pasted the paragraph below from IRS Publication 590A. Again, I think turbotax is calculating this incorrectly, but I understand that you are experts in this field and I am not. What am I missing?

Modified AGI limit for traditional IRA contributions. For 2024, if you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is:

More than $123,000 but less than $143,000 for a married couple filing a joint return or a qualifying surviving spouse,
More than $77,000 but less than $87,000 for a single individual or head of household, or
Less than $10,000 for a married individual filing a separate return.

dmertz

Employee

@tez15 , you are correct that I listed the wrong phase out ranges. It seems that I had a flashback to the days when the MAGI ranges were lower and read the table wrong. You can disregard my post.