Employer Retirement Plans
Case Study 1
Emily, 36 years old, is single, and her modified AGI was $59,500. She is covered by a retirement plan at work. Emily's $5,000 traditional IRA contribution will be reduced or modified on her tax return because her modified AGI is between $56,000 and $66,000.
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 |
$56,000 or less |
More than $56,000 but less than $66,000 |
$66,000 or more |
| Married Filing Jointly or Qualifying Widow(er) |
$90,000 or less |
More than $90,000 but less than $110,000 |
$110,000 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. |
