Skip to Content

Deduction

Last Updated November 29, 2014

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

2014 MAGI

(c) www.deniseappleby.com

2015 MAGI

Allowed deduction

Single

$60,000 or less

$61,000 or less

100%

$60,000 - $70,000

$61,000 - $71,000

Partial

$70,000 or more

$71,000 or more

None

Married filing jointly or a qualifying widower, and active

$96,000 or less

$98,000 or less

100%

$96,000 - $116,000

$98,000- $118,000

Partial

$116,000 or more

$118,000 or more

None

Married filing jointly. Not active, but spouse is active

$181,000 or less

$183,000 or less

100%

$181,000 - $191,000

$183,000 - $193,000

Partial

$191,000 or more

$193,000 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})

Related Articles Tutorial or Other Content