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Traditional IRA Deduction Limits

If a taxpayer qualifies to contribute to a traditional IRA, there are traditional IRA deduction limits to determine if the contributions to the traditional IRA is tax deductible in full or partly tax deductible. For example, if the taxpayer is covered by an employer retirement plan such as a 401k at any time during the tax year for which the contributions to the traditional IRA are made, then the tax deductions may be fully or partially reduced.

How do I know if I am covered by an employer retirement plan?

The tax form W-2 that your employer sends out each year has a checkbox, Box 13, used to indicate if an employee is covered by a retirement plan for the year. Box 13 on W-2 form indicates 'Retirement Plan' is checked if the employee is covered.

Traditional IRA Deduction Limits

What are the traditional IRA deduction limits?

If the taxpayer is covered by an employer retirement plan, his or her tax deduction will be reduced or phased out if the modified adjusted gross income or AGI is (2007 IRA deduction limits):

More than
Less than
Tax filing status
$83,000 $103,000 Married filing jointly or Qualified Widow(er)
$52,000 $62,000 Single or Head of Household
$10,000 Married filing separately, unless did not live with spouse at all during the year (considered single)

If a married filing jointly taxpayer is not covered by an employer retirement plan but his or her spouse is, then the deduction on the income tax return is reduced or phased out if the modified adjusted gross income or AGI is:

More than
Less than
Tax filing status
$156,000 $166,000 Married filing jointly

What to do with nondeductible contributions to traditional IRA?

File tax form 8606, Nondeductible IRAs to report contributions to an IRA that are nondeductible.

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