IRA contribution at 70 1/2 year old

Taxpayer became 70 1/2 year old in August 2019. And he had also started taking RMD in 2019.

My tax program still allows him to make deductible IRA contribution for year 2019, is it wrong?

Looks wrong to me. See sec 219(d)(1). There are changes for 2020.

Does anyone else use Drake? Would you do a test to see if it is true that the 2019 program allows taxpayer over 70 1/2 year old to make IRA contribution?

I am a Drake user. IRA contributions are entered via the 8606 screen . The tax software does allow a IRA deduction in 2019 for someone who is age 70 1/2 but in the "Notes" section it asks you to verify that the taxpayer is under age 70 1/2 .

On a sample test return with a date of birth at 02-20-1947 (over 70 1/2) Drake allows the IRA contribution but gives an error message #5149. The message indicates taxpayer's age is over the limit for making IRA contributions. Change date of birth to 02-20-1949 (70 1/2 by 12-31-2019) Drake allows IRA with no error message.

Proseries checks the age to see if age 70 1/2 in the tax year. If so records the IRA contribution as an excess contribution.

I am a Drake user. IRA contributions are entered via the 8606 screen . The tax software does allow a IRA deduction in 2019 for someone who is age 70 1/2 but in the "Notes" section it asks you to verify that the taxpayer is under age 70 1/2 .

Is there a particular situation that a taxpayer who has reached 70 1/2 in 2019 can still make deductible IRA contribution? If none, why would the program first allow it and then ask us to verify it on the Note page?

Is there a particular situation that a taxpayer who has reached 70 1/2 in 2019 can still make deductible IRA contribution?

No.IRC 219(d)(1) No deduction shall be allowed under this section with respect to any qualified retirement contribution for the benefit of an individual if such individual has attained age 70½ before the close of such individual’s taxable year for which the contribution was made.

Is there a particular situation that a taxpayer who has reached 70 1/2 in 2019 can still make deductible IRA contribution?. Yes. but not in OP's facts. Sec 219(f)

(3) Time when contributions deemed made
For purposes of this section, a taxpayer shall be deemed to have made a contribution to an individual retirement plan on the last day of the preceding taxable year if the contribution is made on account of such taxable year and is made not later than the time prescribed by law for filing the return for such taxable year (not including extensions thereof).

Does everybody have the exact date of birth of each and every client? I would have to admit that in some cases that would be a no for me.

Tenletters, I believe I do, having acquired an elderly-leaning block of fees last year. One certainly needs the year, so why not go the whole hog? When I am flirting with my newly-acquired lady clients of certain years, I mention it being ungallant but I have to ask it anyway, and I get met either by a blank stare or a wee chuckle. I suppose the Sean Connery accent that helps.

Back in the day, I required notarized copies of the birth certificates.

Um, doesn’t every return now require a drivers license? Isn’t the date of birth on such doc? I always check out the DOB on the license to be sure I have it right.....

Um, doesn’t every return now require a drivers license? Isn’t the date of birth on such doc? I always check out the DOB on the license to be sure I have it right.....

I surely have the DOB of the taxpayer and the DOB had been entered to the tax program. That is also the reason I am wondering why the tax program would first allow the IRA contribution and then ask us to verify it in the 'Notes' section. It should have enough information with the DOB to determine that the taxpayer was not qualified for making the IRA contribution, is it right? That is also the reason that I asked in post #7 if there is any special situation that IRA contribution might still be allowed in order to explain why the program would allow it.

Just want to confirm.

Taxpayer became 70 1/2 year old in 2019 and he had started the RMD withdrawal. Then the new rule makes him below the age to have to take RMD. However, since he has already started the RMD, he will have to continue taking RMD in 2020 even if he is still under 72 year old, is it right?

RMD suspended for 2020 under cares act

Didn’t secure act increase age limit?


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