All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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Member
Posts: 3
Registered: ‎04-15-2018

Traditional IRA deduction rules for married filing jointly (MFJ)

Hello,

 

We have filed our taxes as MFJ (married filing jointly). I am covered by a retirement plan however my spouse is not. We made traditional IRA contribution for my spouse for tax saving purposes. But to my surprise, it turned out that the IRA contribution was not tax deductible. Is this an error, I am not sure what happened (reference below). Please help me understand this.

 

https://www.irs.gov/retirement-plans/2017-ira-deduction-limits-effect-of-modified-agi-on-deduction-i....

 

Thanks!

Council Member
Posts: 508
Registered: ‎04-06-2016

Re: Traditional IRA deduction rules for married filing jointly (MFJ)

Using the chart in your link, your wife would fall into the category that says:

married filing jointly with a spouse who is covered by a plan at work

$186,000 or less

a full deduction up to the amount of your contribution limit.

more than $186,000 but less than $196,000

a partial deduction.

$196,000 or more

no deduction.

since her spouse (you) is covered by a plan at work.


If her contribution is being considered non-deductible it means the program thinks your AGI before the contribution is $196,000 or more.  It would need to be less than $186,000 to be fully deductible.

Karen

Member
Posts: 3
Registered: ‎04-15-2018

Re: Traditional IRA deduction rules for married filing jointly (MFJ)

KarenNC15, 

 

If her contribution is being considered non-deductible it means the program thinks your AGI before the contribution is $196,000 or more.  It would need to be less than $186,000 to be fully deductible.

 

Thats exactly the problem, our AGI or Modified AGI is less that $186,000. I do not know what to do next. Our taxes were filed with H&R block but the tax consultant did not reply back. Any ideas?

Council Member
Posts: 508
Registered: ‎04-06-2016

Re: Traditional IRA deduction rules for married filing jointly (MFJ)

[ Edited ]

It sounds like the program thinks your spouse was also covered by a work retirement plan.  Did she have any W-2 income? If so, make sure the retirement plan isn't checked. Or does she have self-employment income that she had started a retirement plan for (like a SEP-IRA. SIMPLE-IRA, or individual 401-k)? 


If neither of those is the case, I'm at a loss.

 

Karen

Member
Posts: 3
Registered: ‎04-15-2018

Re: Traditional IRA deduction rules for married filing jointly (MFJ)

My wife had W-2 income and the retirement plan is not checked on the form.

 

What should i do now?

Highlighted
Council Member
Posts: 508
Registered: ‎04-06-2016

Re: Traditional IRA deduction rules for married filing jointly (MFJ)

Have you checked to see if it's checked in the form where it was entered in the H&R Block software?  If it's not checked there, I don't know what to recommend other than trying to contact someone at H&R Block who can look at it personally, starting a brand new return from scratch to see if it works correctly, trying a different software program, or overriding it and mailing in your return-- not necessarily in that order.

 

Sorry I can't be of more help!
Karen