Why can't I deduct my 6500 IRA contribution and why did form 8606-T get generated in TurboTax?
Q: In processing my 2016 tax filing TurboTax Premier has filled out a form: 8606-T and I want to know if I can still make the contribution to my IRA though it is not deductible. I was told it is not deductible because I had "too high of an income due to capital gains now called INCOME from investments I sold in 2016.
In processing my taxes TurboTax Premier software has filled out a form: 8606-T
I want to know if I can still make the $6,500 contribution to my IRA though it is not deductible ?reason not deductible-- because I had an employer 401K plan for 5 months and that amount was around 3,300.00 only.
Is this answer right:
Yes. You can make still make the $6500 contribution to your Traditional IRA even though you wont be able to deduct it on your tax return. The purpose of the 8606 Form is to report that these contributions are nondeductible so that you wont be taxed when these contributions are distributed. Additionally, the amount that you can contribute to your Traditional IRA is NOT affected by the amount that you contributed to your 401(k). The significance of the 401(k) contribution is that it is limiting the amount of your Traditional IRA deduction on the tax return