Why is TT saying I can only deduct $2,032 of my $5k IRA contribution when my total IRA contribution does not exceed $7k nor exceed earned income?

Forum|Forum|1 year ago
March 22, 2025
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MindyB

It sounds like your income may be too high. IRA contributions are only partially deductible when your Modified Adjust Gross Income (MAGI) falls in a certain range, which depends on your filing status. For a single, in 2024 that range is $77,000 - $87,000.

For more information and the ranges for all filing statuses, see: Is an IRA contribution deductible?

jgrigas1Author

My income was not that high so I don't understand why the software is saying I'd be penalized.

VolvoGirl

Employee

How much was your earned income? What kind of income? From W2 or a Net Profit on Schedule C for self employment. If you only have self-employment income you can only contribute up to your net profit reduced by the deduction allowed for one-half of your self-employment taxes then only up to the max IRA limit.