IRAs and Other Retirement Plans

Modified Adjusted Gross Income (AGI) Limit

For 2011, 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 $90,000 but less than $110,000 for Married Filing Jointly taxpayers or Qualifying Widow(er),
• More than $56,000 but less than $66,000 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 $169,000 but less than $179,000. If the modified AGI is $179,000 or more, no deduction for contributions to a traditional IRA is allowed.