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

Adjustments to Income

IRA Contributions

Employer Retirement Plans

Case Study 1

Emily, 36 years old, is single, and her modified AGI was $61,000. She is covered by a retirement plan at work. Emily's $5,500 traditional IRA contribution will be reduced or modified on her tax return because her modified AGI is between $60,000 and $70,000.

Table 1
Effect of Modified AGI on Traditional IRA Deduction
(if taxpayer is covered by employer retirement plan)
Filing Status A full deduction is allowed: A partial deduction is allowed: No deduction is allowed:
Single or Head of Household $60,000 or less More than $60,000 but less than $70,000 $70,000 or more
Married Filing Jointly or Qualifying Widow(er) $96,000 or less More than $96,000 but less than $116,000 $116,000 or more
Married Filing Separately * Less than $10,000 $10,000 or more
* If the taxpayers did not live with their spouse at any time during the year, their filing status is considered Single for this purpose.
Emily.