Your deduction may vary according to your modified adjusted gross income (MAGI) and whether you're covered by a retirement plan at work.
Everyone is eligible to make contributions to a traditional IRA, but a tax deduction for those contributions may not always be available.
You may need to reduce or eliminate your IRA deduction if you or your spouse:
- contributes to an employer-sponsored retirement plan, such as a 401(k) or 403(b), and
- your Modified adjusted gross income (MAGI) exceeds annual limits.
If you and your spouse are not eligible to contribute to an employer's plan, you can deduct your contribution as long as you earn income during the year.
For purposes of the IRA deduction, earned income excludes interest, dividends and similar types of investment income.
Click here for Deductions Allowed for Contributions to a traditional IRA.
Click here for 2023 IRA deduction limits.
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