Case Study 5: Employer Retirement Plans
Emily, 36 years old, is single, and her modified AGI was $78,000. She is covered by a retirement plan at work. There will be a partial deduction to Emily's $7,000 traditional IRA contribution because her modified AGI is more than the phaseout amount.
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 |
$77,000 or less |
More than $77,000 but less than $87,000 |
$87,000 or more |
| Married Filing Jointly or Qualifying Widow(er) |
$123,000 or less |
More than $123,000 but less than $143,000 |
$143,000 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. |
