Will someone with a $200,000 income get tax benefit if they deposit $7000 to the traditional IRA?

[mplusplus]

Hi there

Will someone with a $200,000 income get tax benefit if they deposit $7000 to the traditional IRA?

Thanks.

[GiseleD]

It depends. Are you or your spouse (if applicable) covered by a retirement plan at work? If so, there are phaseouts that limit the IRA deduction. 

[mplusplus]

Hi, both of us have 401Ks with employer matching. We are married filing jointly. 

As per your link as we earn over $123,000 so we get no tax deduction even if we deposit money in IRA, right?

Thanks.

[AmyC · Accepted solution]

Correct, no deduction for you. You can put the money in and keep track of the basis. The money will grow tax deferred inside of the account. The tax deferral of the earnings is the only bonus for you.