IRAs - Contributions - Deductibility

Question 1

How doe active participation in an employer retirement plan impact the ability to contribute to an IRA?

Answer 1

It does not have any impact on the ability to contribute to a traditional or Roth IRA. It only impacts whether contributions to a traditional IRA are tax deductible.

Question 2

For a single person who is not an active participant in an employer retirement plan, what are the limits on deductibility of a traditional IRA contribution?

Answer 2

Assuming no active participation (i.e. actively making contributions) in an employer plan, the single person can make a fully deductible traditional IRA contribution without regard to any kind of income limits.

Question 3

For a married couple, one of whom in an active participant in an employer retirement plan, and the other isn’t, what are the limits on deductibility of a traditional IRA contribution for each?

Answer 3

For the spouse who is an active participant, deductibility will phase out for AGI $101k to $121k. For the non-participant spouse, dedcutibility will phase out between $188k and $199K.