Is this TurboTax/Mint Roth plan to good to be true?

Question

In starting to do my 2012 taxes, TurboTax suggested I look at their deduction finder. They suggestion that I could make a nondeductible Roth IRA contribution up to $6000 per year. While not deductible, the earnings do not have to be reported as income. This sounds to good to be true.

At this time I have been retired and taking minimum required distributions from a traditional IRA. I have no income other than from investments and Social Security. That is, I am not an employee with any income reported on a W-2. I am still trying to figure out just what TurboTax is trying to tell me and just what Roth IRA rules are. I think TurboTax thinks that I am an active wage earner that is not part of a pension plan.

It sure would be helpful know if tracking such a Roth plan is a wild goose chase or truly some unbelievable windfall.

JoeTaxpayer · Accepted Answer

It's pretty simple, you need earned income, or a working spouse with earned income to permit you to deposit to any IRA. If nothing led the software to think you are a wage earner (or have a wage earning spouse) there's a bug that will likely get cleaned up soon.

Salmon Egg · Answer

Thank you. I spent too much time finding out pretty much the same information. It seems to be a selling point for tax programs. My personal wish is that they do not send us on these fruitless hunts. Instead, I would like TurboTax to spend more effort to make their software easier to use.

Allow use of PageUp and PageDown from the keyboard instead of using a mouse.
Use of Find to find an occurrence of a keyword on a form.

These are just two suggestions. There are countless others that would make the software easier to use.

Is this TurboTax/Mint Roth plan to good to be true?

Join the Discussion

Didn't find your answer?