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How TurboTax Calculates IRA Deductibility

An IRA (Individual Retirement Arrangement) is a retirement savings plan that has special tax breaks. However, there are numerous guidelines that determine the amount of the tax break (if any), depending on the type of IRA, your "earned" income, and whether you (and your spouse) have other retirement plans. TurboTax takes all these factors into consideration when calculating the deduction for you.

Your IRA contribution might not be deductible if:

  • You had no earned income, the contributions are not deductible.
  • Your income was too high and both you and your spouse are covered by a work retirement plan.
  • Your income was too high and just one of you is covered by a work retirement plan. (This has a higher income limit than if both of you are on a work retirement plan.)

For more complete details on IRA contribution deductions, you can review the help in TurboTax (enter the search term for "IRA details") or visit the IRS web site.


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