Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

What's New This Year

Income

IRAs and Other Retirement Plans

Modified Adjusted Gross Income (AGI) Limit

For 2013, the maximum IRA deduction increases to $5,500 ($6,500 if age 50 or older). If a taxpayer is covered by a retirement plan at work, the deduction for contributions to a traditional IRA is reduced (phased out) if the modified AGI is:

  • More than $95,000 but less than $115,000 for Married Filing Jointly taxpayers or Qualifying Widow(er),
  • More than $59,000 but less than $69,000 for a Single or Head of Household, or
  • Less than $10,000 for Married Filing Separately.

If only one spouse is covered by a retirement plan at work and the taxpayers live together or file a joint return, the deduction is phased out if the modified AGI is more than $178,000 but less than $188,000. If the modified AGI is $188,000 or more, no deduction for contributions to a traditional IRA is allowed.