Who May Make Deductible IRA Contributions?

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Who May Make Deductible IRA Contributions?

Can you deduct your contributions to an individual retirement account (IRA) from your income for tax purposes? The answer depends on your income level and filing status, among other factors.

If you are single

Your contributions are fully deductible if you are single and not covered by another employer plan. If you are married and neither you nor your spouse is covered by another employer plan, contributions are also fully deductible.

Contributions to an IRA made after 1986 are not fully deductible if the individual participates in an employer-sponsored retirement plan. Individuals who are covered by such a plan must use their modified adjusted gross income (MAGI) from their tax forms to determine how much may be deducted.

If you are married and in an employer plan

For 2025, if you are married, filing taxes jointly, and:

• both you and your spouse are covered by an employer plan, IRA deductibility begins to decline at MAGI over $126,000. At $146,000, it drops to zero.
• you are covered by an employer plan but your spouse is not, your IRA deductibility also begins to decline at MAGI over $126,000.
• your spouse is covered by an employer plan but you are not, your IRA deductibility for 2025 begins to decline at MAGI over $236,000. At $246,000, it drops to zero.

If you are single and in an employer plan

For 2025, the phase-out starts at $79,000 if you are a single taxpayer. The maximum allowable deduction drops as your adjusted gross income rises above these limits, called phase-out points. Once your MAGI reaches $10,000 over the phase-out point, your deduction is zero. For 2025, this point is $89,000.

IRS Publication 590a provides worksheets to help you with your calculations.

Knowing your eligibility for taking the IRA deduction can help you decide whether to invest in the traditional IRA, or whether some alternative, such as the Roth IRA, is the best plan for you.