Contribution to IRA- decuctibility

[mircpa]

I got a question. Client is covered by 401K thru employer & contributed 1,284.00 towards 401K during 2017 & .W-2 has code D with this amount.  Also contributed 2,500.00 towards IRA. I checked IRS guidelines it says sure he does qualifies as his income is less than limitation. When I punch this amount in traditional IRA in ATX. It is disallowing & covered by retirement plan is checked. I am wondering is there a way to work around to make ATX allow this deduction.

[Catherine]

Why would you expect this to be deductible?  If covered (or coverable, even if he does not participate) by a work plan, that's it.  No deduction.  The client has the option of making a traditional NON-deductible contribution, or a Roth contribution (if within income limitations).

[Lee B]

(IRA Phaseouts if you are covered by a retirement plan at work from irs.gov)   If Your Filing Status Is...	And Your Modified AGI Is...	Then You Can Take...
single or head of household	$62,000 or less	a full deduction up to the amount of your contribution limit.
	more than $62,000 but less than $72,000	a partial deduction.
	$72,000 or more	no deduction.
married filing jointly or qualifying widow(er)	$99,000 or less	a full deduction up to the amount of your contribution limit.
	more than $99,000 but less than $119,000	a partial deduction.
	$119,000 or more	no deduction.
married filing separately	less than $10,000	a partial deduction.
	$10,000 or more	no deduction.
If you file separately and did not live with your spouse at any time during the year, your IRA deduction is determined under the "Single" filing status

[jklcpa]

I don't use ATX any more so can't say if this is still true, but ATX used to have a worksheet that would calculate any limitation in these cases. If the worksheet is still in the program, make sure you are using it.  That's all I can offer.

[Jack from Ohio]

2 hours ago, jklcpa said:

I don't use ATX any more so can't say if this is still true, but ATX used to have a worksheet that would calculate any limitation in these cases. If the worksheet is still in the program, make sure you are using it.  That's all I can offer.

ATX does have that worksheet, and is is accurate.

[Randall]

11 hours ago, Jack from Ohio said:

ATX does have that worksheet, and is is accurate.

Yes and it works for Roth IRAs too.  Tracks basis for nondeductible IRAs and Roth IRAs.  Ties into 8606.  Just this season, I had a client who took a distribution from his IRA.  I wasn't thinking of the basis but the software calculated zero taxable and when I looked to see why, the 8606 info was rolled over.  I had to input the account balance and it calculated correctly.  Only $500 was nontaxable but that was better than nothing.

 

[mircpa]

Never mind. His AGI is 126K. High threshold income limitation is 119K for married filing jointly, so ATX disallowed. Thanks to all who responded.