Individual Retirement Arrangement (IRA) Deduction

Updated on: Jun 25, 2018

You may be able to deduct your contributions to a traditional IRA depending on your income, filing status, whether you are covered by a retirement plan at work, and whether you receive social security benefits.

 

A traditional IRA is any IRA that isn’t a Roth IRA or a SIMPLE IRA. You can never deduct contributions to a Roth IRA.

 

The new tax law didn’t change the treatment of deductions for contributions made to an IRA. However, the contribution (deduction) and modified adjusted gross income limitations are adjusted annually for inflation. 

Previous (2017)

For 2017, you can contribute to a traditional IRA up to:

 

  • $5,500, or
  • $6,500 if you were age 50 or older by the end of 2017.

 

However, you may not be able to deduct all your contributions depending on your modified adjusted gross income and whether you or your spouse were covered by an employer retirement plan.

 

For a more detailed description of the requirements to deduct IRA contributions, see IRS Publication 590-A, Contributions to Individual Retirement Arrangements.

Change

The new tax law didn’t change the treatment of deductions for contributions made to an IRA. However, the contribution (deduction) and modified adjusted gross income limitations are adjusted annually for inflation. 

How will this affect me?

Scenario 1

For examples see IRS Publication 590-A, Contributions to Individual Retirement Arrangements for examples on calculating the IRA deduction.

Where to find it on the tax return: