IRA Deduction. Spouse covered at work.

[drennman]

Our MAGI is under the limit for "married filing jointly with a spouse who is covered by a plan at work."   IRS says a "full deduction up to the amount of your contribution limit."  The site says the contribution limit is $7000.  Earned income well about $7000 because IRA deduction can't be more than earned income.

However, I am getting an IRA deduction of only about $2500.   I can't find any info that would limit my deduction.  

While IRS says "Deducting your IRA contribution Your traditional IRA contributions may be tax-deductible. The deduction may be limited if you or your spouse is covered by a retirement plan at work and your income exceeds certain levels."

Ideas?  Thanks.

IRS Chart 

https://www.irs.gov/retirement-plans/plan-participant-employee/2020-ira-contribution-and-deduction-l...

[ThomasM125]

The deduction is phased out for income between $104,000 and $124,000 for a married couple. You said your income was below the phase out, but you may mean it is below the complete phase out limit, but some may be disallowed if you make more than the lower limit.

[drennman]

Thanks so much for the info!

I am still confused though as the IRS says that a full deduction is allowed up to 196K and partial for 196-206K for the case when you are not covered by a plan at work.  Isn't the 104K you are quoting for the case when you are covered by a plan at work?

Excerpts from the IRS info:

If you're not covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction.

married filing jointly with a spouse who is covered by a plan at work	$196,000 or less	a full deduction up to the amount of your contribution limit.
more than $196,000 but less than $206,000	a partial deduction.
$206,000 or more	no deduction.

If you're covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction.

married filing jointly or qualifying widow(er)	$104,000 or less	a full deduction up to the amount of your contribution limit.
more than $104,000 but less than $124,000	a partial deduction.
$124,000 or more	no deduction.