Deduction
Last Updated March 26, 2018
Definition
Tax write-off which is allowed for contributions to traditional IRAs or employer sponsored plans.
Individuals who are active participants are eligible to deduct their traditional IRA contributions, only if their MAGI amounts do not exceed certain limits. The MAGI that applies to each tax-filing status is as follows:
The MAGI that applies to each tax-filing status is as follows:
|
Tax Filing Status |
2017 MAGI |
2018 MAGI |
Allowed deduction |
|
Single |
$62,000 or less |
$63,000 or less |
100% |
|
$62,000 - $72,000 |
$63,000 - $73,000 |
Partial |
|
|
$72,000 or more |
$73,000 or more |
None |
|
|
Married filing jointly or a qualifying widower, and active |
$99,000 or less |
$101,000 or less |
100% |
|
$99,000 - $119,000 |
$101,000- $121,000 |
Partial |
|
|
$119,000 or more |
$121,000 or more |
None |
|
|
Married filing jointly. Not active, but spouse is active |
$186,000 or less |
$189,000 or less |
100% |
|
$186,000 - $196,000 |
$189,000 - $199,000 |
Partial |
|
|
$196,000 or more |
$199,000 or more |
None |
|
|
Married filing separately |
Less than $10,000 |
Less than $10,000 |
Partial |
|
$10,000 or more |
$10,000 or more |
None |
See Nondeductible contribution
Referring Cite
IRC § 219(g), IRC § 404
Additional Helpful Information
- Contributions to employer sponsored plans are deductible only if they are within statutory limits
- The following formula is used to calculate the deductible IRA contribution amount, for an active participant ( see Active Participant)
(Highest dollar limit of MAGI range - MAGI) x(Contribution limit/{Highest dollar limit of MAGI range- Lowest dollar limit of MAGI range})
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