[Disregard this post. I listed the wrong phaseout ranges.]
The $123,000 threshold for deductibility of the traditional IRA contribution only applies to the spouse that is not covered by a workplace retirement plan. The phase-out of the deduction for a traditional IRA contribution made by the spouse who is covered by a workplace retirement plan is a Modified AGI occurs between $77,000 and $87,000.
If the wrong spouse is being subjected to the lower phase-out range, make sure that you have marked the W-2 as belonging to the correct spouse.
