Traditional IRA Deductions

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Lenore128
Posts: 2
Joined: Fri Sep 15, 2017 3:12 pm

Traditional IRA Deductions

Post by Lenore128 » Fri Sep 15, 2017 3:17 pm

I have been researching IRAs (Roth vs Traditional) and am trying to understand the deduction limits for Traditional IRAs.

Looking at the IRS website (https://www.irs.gov/retirement-plans/ir ... ion-limits) There are two links per year, one if you ARE covered by a retirement plan at work and one if you are NOT. For 2017, if you ARE covered and make under $99,000 per year (MFJ), then you can deduct your full contribution. However, if you are NOT covered, but MFJ with a spouse that is, the MAGI limit is $186,000.

I am not understanding the two different MAGI limits. Simply put, my husband is covered but I am not. If he were looking up this information, he would say he is covered and the limit is $99,000. However, since I’m the one looking up this information, I choose the “I’m not covered but he is” option and the limit is $186,000.

So, which one is it? What am I missing? I’m sure this is a stupid question, but I can’t find an explanation for the difference.

kaneohe
Posts: 4369
Joined: Mon Sep 22, 2008 12:38 pm

Re: Traditional IRA Deductions

Post by kaneohe » Fri Sep 15, 2017 3:40 pm

You have 2 TIRAs that are in play here......yours and spouse. Different rules for each of you. Use your rule for your IRA and his rule for his.

FactualFran
Posts: 428
Joined: Sat Feb 21, 2015 2:29 pm

Re: Traditional IRA Deductions

Post by FactualFran » Fri Sep 15, 2017 3:42 pm

According to the Limits if Covered by Employer Plan of IRS Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs): "If either you or your spouse was covered by an employer retirement plan, you may be entitled to only a partial (reduced) deduction or no deduction at all, depending on your income and your filing status."

jshanley002
Posts: 4
Joined: Wed Mar 29, 2017 2:45 pm

Re: Traditional IRA Deductions

Post by jshanley002 » Fri Sep 15, 2017 3:45 pm

Hi Lenore,
You would be eligible to make a deductible contribution if your AGI is below $186,000. Partial contribution between $186-196.

So the MAGI limit that applies to you is $186k. Your husband could only make a deductible IRA contribution for himself if MAGI was below $99k

Lenore128
Posts: 2
Joined: Fri Sep 15, 2017 3:12 pm

Re: Traditional IRA Deductions

Post by Lenore128 » Fri Sep 15, 2017 3:54 pm

Thanks for the replies. I knew it was simple, I just could not figure it out. Thanks again!

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