Case Study 1: IRA Contributions
During the tax year, Fred contributed $2,200 to a traditional IRA and $1,000 to a Roth IRA. The most Fred will be able to deduct is the $2,200 contribution to his traditional IRA. He may be eligible for the Retirement Savings Contribution Credit for the Roth IRA contribution.
See Publication 590-A, Individual Retirement Arrangements and the Retirement Income lesson for more information.
Although contributions to a Roth IRA cannot be deducted, the taxpayer may be eligible for the retirement savings contribution credit, discussed in the lesson on Miscellaneous Credits.