IRA deduction and IRS


Q. I retired from the Defense Department on Dec. 31, 2009, and received my final paycheck in 2010. I purchased a traditional IRA for 2010, and claimed an income tax deduction for that IRA. I just received notice from the Internal Revenue Service that they have disallowed the deduction stating that according to my W-2 from DoD, I was covered by an employer retirement plan in 2010.

My agency payroll office tells me an amount of approximately $13 was added to my retirement account based on my final paycheck, which I received in 2010.

The IRS suggested I have my agency modify the W-2.

My agency says it does not have the authority to modify the W-2.

The reality is I was no longer a DoD employee. Do I have any options?

A. This is a question for a tax attorney or CPA — preferably one who will stand behind your tax return.


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to and view his blog at

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