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Employee
March 14, 2024
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What is the retirement tax break TurboTax was talking about? Is this about the Roth IRA contribution income limit?

  • March 14, 2024
  • 1 reply
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My income dropped a lot last year, and I believe I am finally eligible to contribute to Roth IRA for 2023. However, turboTax still says that: It turns out you don't qualify for a retirement tax break. You can still contribute up to $6500 to an IRA, but because of your income, you are not eligible to tax a deduction this year.  And I would like to understand what tax break it is talking about...
Best answer by DawnC

Not the Roth, the tax break is for a traditional IRA contribution.  If you contribute to a traditional IRA, Roth IRA contributions aren’t deductible, you may be able to deduct your contribution, depending on whether you were covered by an employer based plan and your income.     


Traditional IRAs

  • Retirement plan at work: Your deduction may be limited if you (or your spouse, if you are married) are covered by a retirement plan at work and your income exceeds certain levels.
  • No retirement plan at work: Your deduction is allowed in full if you (and your spouse, if you are married) aren’t covered by a retirement plan at work.

These charts show the income range in which your deduction may be disallowed if you or your spouse participates in a retirement plan at work:

2023

1 reply

DawnC
DawnCAnswer
Employee
March 14, 2024

Not the Roth, the tax break is for a traditional IRA contribution.  If you contribute to a traditional IRA, Roth IRA contributions aren’t deductible, you may be able to deduct your contribution, depending on whether you were covered by an employer based plan and your income.     


Traditional IRAs

  • Retirement plan at work: Your deduction may be limited if you (or your spouse, if you are married) are covered by a retirement plan at work and your income exceeds certain levels.
  • No retirement plan at work: Your deduction is allowed in full if you (and your spouse, if you are married) aren’t covered by a retirement plan at work.

These charts show the income range in which your deduction may be disallowed if you or your spouse participates in a retirement plan at work:

2023

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