IRA Deductibility Rules


Traditional IRA deduction rules for 2011:


Each year the IRS increases the income levels whereby your contributions to a traditional IRA are tax deductible. As you do your taxes for 2011 or as you consider making a contribution to your IRA account for 2011, below are the IRA deductibility and income limits for 2011.

Effect of Modified AGI on deduction  of your traditional IRA if you are covered by a retirement plan at work:
If you are covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your traditional IRA deduction.

If your filing status is AND your modified adjusted gross income (modified AGI) is.. THEN you can take…
single or head of household $56,000 or less a full deduction.
more than $56,000 but less than $66,000 a partial deduction.
$66,000 or more no deduction.
married filing jointly or qualifying widow(er) $90,000 or less a full deduction.
more than $90,000 but less than $110,000 a partial deduction.
$110,000 or more no deduction.
married filing separately*
less than $10,000 a partial deduction.
$10,000 or more no deduction.

* If you did not live with your spouse at any time during the year, your filing status is considered Single for this purpose (therefore, your IRA deduction is determined under the “Single” filing status).

Effect of Modified AGI on deduction of your traditional IRA if you are NOT covered by a retirement plan at work:
If you are not covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your traditional IRA deduction.

If your filing status is And your modified adjusted gross income (modified AGI) is… THEN you can take
single, head of household, or qualifying widow(er) any amount a full deduction.
married filing jointly or separately with a spouse who is not covered by a plan at work any amount a full deduction.
married filing jointly with a spouse who is covered by a plan at work $169,000 or less a full deduction
more than $169,000 but less than $179,000 a partial deduction
$179,000 or more no deduction.
married filing separately with a spouse who is covered by a plan at work less than $10,000 a partial deduction.
$10,000 or more no deduction.

Source: IRS