An individual who is an active participant in a qualified retirement plan cannot make deductible contributions to a traditional IRA unless her modified adjusted gross income is below certain specified levels.The level depends on the type of income tax return the individual files. For single taxpayers and heads of household, the otherwise allowable deduction is phased out ratably in 2006 and later years, when the taxpayer's MAGI is between $50,000 and $60,000.
For married taxpayers who file joint returns, it is phased out ratably when MAGI is between $75,000 and $85,000 in 2006, and between $80,000 and $100,000 in 2007 and later years. For married taxpayers filing separate returns, it is phased out ratably when MAGI is between $0 and $10,000.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access