For any Traditional IRA deduction, you must have earned income. If you do, there are a couple of possibilities. If you (and/or your jointly-filing spouse) didn't contribute to an employer-sponsored or self-employed retirement plan like a 401(k), your entire Traditional IRA contribution is deductible.
But if you (and/or your jointly-filing spouse) did contribute to an employer-sponsored or self-employed retirement plan in 2021, the amount you can deduct depends on your tax filing status and modified adjusted gross income (MAGI).
If your MAGI is:
- Below the phase-out range, your entire contribution is deductible
- Above the phase-out range, you can't deduct anything
- Within the phase-out range, you can make a partial deduction (we'll calculate this for you)
Here are the MAGI phase-out ranges for tax year 2021 if you were covered by a retirement plan at work:
- Single, head of household, or married filing separately (not living with spouse): The phase-out range is $66,000 – $76,000
- Married filing jointly or qualified widow(er): The phase-out range is $105,000 – $125,000
- Married filing separately (living with spouse): The phase-out range is $0 – $10,000
If you weren't covered by another retirement plan at work, but your spouse was, and you're:
- Filing jointly: the phase-out range is $198,000 – $208,000
- Filing separately, the phase-out range is $0 – $10,000