If your modified AGI is $117,000, you each fall in the $104,000 to $124,000 phase-out range. The maximum deduction for each of your traditional IRA contributions will depend on your your actual AGI, but calculating based on a modified AGI of exactly $117,000, the maximum deduction for each of you separately would be:
$7,000 * ($124,000 - $117,000)/ $20,000 = $2,450
With each of you contributing at least $2,450 to traditional IRAs, your maximum combined IRA deduction would be $4,900.
Your modified AGI is your AGI with any deduction for a traditional IRA contribution added back. In other words, your modified AGI is effectively figured without any IRA contribution. (There are a few other modifications that are made to AGI for this purpose, but they are uncommon and unlikely to apply in this simple case. See Critter-3's answer for these details.)
You are under the well under the beginning of the phase-out range for a Roth IRA contribution, so whatever portion of the $7,000 contribution limit each of you does not contribute to a traditional IRA can be contributed to a Roth IRA instead. You might each just contribute the entire $7,000 limit to Roth IRAs for the eventually tax-free growth instead of tax-deferred growth. The relatively low tax rates at the moment make the deduction for traditional IRA contributions harder to justify than when tax rates are higher. Tax rates are scheduled to go back up in 2026.
