The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Turbo-Tax woe||Date: 2/15/2003 12:50 AM|
|Author: irasmilo||Number: 63845 of 124931|
Here's the problem. My wife and I file jointly. We're mostly retired although she has a part-time job that paid her about $5,500 last year. On the advice of a financial adviser, we each added $2,500 to our Roth IRAs. Turbo-Tax insists that is far more than we were entitled to and won't allow us to complete the return.
Our only other income for 2002 was her pension, Social Security and a paltry return on investments.
I was under the impression we could contribute up to the total of her earned income. Turbo-Tax says no.
Since you are receiving a pension and Social Security, it's probably safe to assume you are both over age 50. Your maximum IRA contribution for 2002 would be the lesser of $7000 or earned income. I can think of several reasons (other than a program bug) why TurboTax might be holding up your return:
1) If your wife's earnings are Schedule C earnings, your contribution will be limited by net business income, not gross income.
2) Your AGI is too high for Roth IRA contributions (not likely)
3) You (or wife) are over age 70 1/2 and you didn't identify IRA contribution as a Roth contribution (contributions to traditional IRAs are prohibited if too old)
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