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Can I take an IRA deduction?

Article ID: 34014 Print
Can I take an IRA deduction?


If you made any nondeductible contributions to a traditional individual retirement arrangement (IRA) during the tax year, you must report them on Form 8606.

If you made contributions to a traditional IRA, you may be able to take an IRA deduction. But you, or your spouse if filing a joint return, must have had earned income to do so. For IRA purposes, earned income includes certain alimony received. See Pub. 590 on the IRS site for details. A statement should be sent to you by June 1, that shows all contributions to your traditional IRA for the tax year.

Our software will figure your IRA deduction for you based on the information you entered. Please review the following items before entering your information:

  • If you were age 70 1/2 or older at the end of the tax year, you cannot deduct any contributions made to your traditional IRA for the tax year or treat them as nondeductible contributions.
  • You cannot deduct contributions to a Roth IRA. If you made contributions to both a traditional IRA and a Roth IRA for the tax year, you will need the use the worksheet in Pub. 590 on the IRS site to figure the amount, if any, of your IRA deduction.
  • You cannot deduct elective deferrals to a 401(k) plan, section 457 plan, SIMPLE plan, or the Federal Thrift Savings Plan. These amounts are not included as income in box 1 of your W-2 form. (You may be able to take the retirement savings contribution credit (Form 8880).
  • If you made contributions to your IRA in the tax year that you deducted for prior year, do not include them in the worksheet.
  • If you received a distribution from a non-qualified deferred compensation plan or non-governmental section 457 plan that is included in box 1 of your W-2 form, do not include that distribution here. The distribution should be shown in box 11 of your W-2 form. If it is not, contact your employer for the amount of the distribution.
  • You must file a joint return to deduct contributions to your spouse's IRA. Enter the total IRA deduction for you and your spouse in the spaces provided.
  • Do not include rollover contributions in figuring your deduction. This is accounted for elsewhere.
  • Do not include trustees fees that were billed separately and paid by you for your IRA. These fees can be deducted only as an itemized deduction on Schedule A.
  • If the total of your IRA deduction on line 24 plus any nondeductible contribution to your traditional IRAs shown on Form 8606 is less than your total traditional IRA contributions for the tax year, see Pub. 590 for special rules.

By April 1 of the year after the year in which you turn age 70 1/2, you must start taking minimum required distributions from your traditional IRA. If you do not, you may have to pay a 50% additional tax on the amount that should have been distributed. For details, including how to figure the minimum required distribution, see Pub. 590 on the IRS site .

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Views: 891 Created on: Jun 15, 2013
Date updated: Aug 19, 2015
Posted in: Deductions

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