Help with my tax situation - IRA for 2016?

[dividendsplease]

Question yall:

DW and I don't have a complicated situation by any means but in 2016 I started a new job and lowered my federal withholding rate via exemptions to 2 because I was married the full year (got married in mid 2015, left it at 1 the rest of the year) and we owe $800 back this year right now prior to getting a brokerage statement which is all we are waiting on. I don't feel like cutting a check for whatever that amount will end up being.

We have a little one due in a week (hooray) and I scaled back on my 401k contributions to hoard cash for the baby and reduced that down to the minimum to get the employer match so that has something to do with it.

In TurboTax it's saying that if I do a traditional IRA by April 17th only $1,530 of $5,500 is deducible because our modified AGI is 112k and I have a employer sponsored retirement plan. If I try to put in 5,500 for a Roth it says I don't qualify for the deduction.

Can anyone that is more versed in this give me the details on why I wouldn't qualify for a roth? Income levels on Vanguards website say 184k married filing joint starts the phase out.

[SeattleCPA]

You do qualify for a Roth, but it doesn't get you any deduction. I think that's the thing you're seeing.

In other words, if you put (say) $5000 into an IRA or 401(k), you often get to adjust your income down by $5,000 and so don't pay taxes on that money.

If you put $5,000 into a Roth, you don't get to adjust your income down by the $5,000.

[teen persuasion]

You can contribute a max of $5500 to any combination of trad/Roth IRA.  When experimenting, did you remove the trad IRA contribution before adding the Roth?  It sounds like TT thinks you've already filled the IRA to the max, so can't add MORE to a Roth IRA.

Another thought - is your spouse employed with a retirement plan?  Even if spouse is unemployed you could contribute to a spousal IRA (using your income), but rules are different.  Check all permutations of limits for each of you.

[dividendsplease]

Wife is a teacher and has a retirement plan so it's doing the same thing in limiting the deduction for the traditional IRA. I guess something is better than nothing.