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Guidelines for Traditional IRA Tax Deductions

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    People Without a Work-Sponsored Retirement Plan

    • If your employer does not offer a retirement plan, such as a 401(k), that you can contribute to, you can deduct your contributions to your traditional IRA regardless of your filing status or income. If you are unsure of whether your employer sponsors a retirement plan, you can either check with your employer or look on the W-2 Form that you receive at the end of the year. If the "Retirement Plan" box is checked, then you have access to a work-sponsored retirement plan.

    Singles With Access to a Work-Sponsored Retirement Plan

    • If you are single and have access to a work-sponsored retirement plan, the deductibility of the contribution depends on your modified adjusted gross income. In order to determine your modified adjusted gross income, take the income figure at the bottom of the first page of your tax return form and add any deductions you claimed for traditional IRA contributions, student loan interest or education expenses, and any employer-paid adoption expenses. For 2009, if you are a single filer and your modified adjusted gross income is less than $55,000, the deductibility of your contribution is unaffected. If your modified adjusted gross income is between $55,000 and $65,000, your deduction will be limited. If your modified adjusted gross income is more than $65,000, you cannot deduct your contribution.

    Married Couples with Access to a Work-Sponsored Retirement Plan

    • If you are married and either you or your spouse has access to a retirement plan at work, whether or not you can deduct your contribution depends on your modified adjusted gross income. For 2009, if you have access to a work-sponsored retirement plan and you file a joint return, you can take the full deduction if your modified adjusted gross income is below $89,000, a limited deduction if your income is between $89,000 and $109,000 and no deduction if your income is over $109,000. If you have access to a work-sponsored retirement plan and file a separate return from your spouse, you cannot claim a full deduction and can only claim a limited deduction if your modified adjusted gross income is between $0 and $10,000. If it is over $10,000 you cannot take any deduction. If your spouse has access to a work-sponsored retirement plan but you do not and you file a joint return, you can take a full deduction if your modified adjusted gross income is less than $166,000, a limited deduction if your modified adjusted gross income is between $166,000 and $176,000 and no deduction if your modified adjusted gross income is above $176,000.

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