John M. Hoffman & Associates CPAs

“What are those income limits and what about my spouse’s retirement coverage?”

For 2007, if both husband and wife on a joint return are covered by a retirement plan at their place of employment (one day of coverage is coverage), the ability to make tax deductible IRA contributions phases out at adjusted gross income (AGI) of $83,000 and is fully phased out at AGI of $103,000. Above those levels, contributions to traditional IRAs would not be deductible.
For single or head of household taxpayers the phase-out range of AGI is $52,000 to $62,000.
For married filing separate the phase-out is between $0 and $10,000 (essentially not possible).
For married filing joint taxpayers where only one person is covered by a retirement plan, the phase-out for the non-covered spouse is $156,000 to $166,000. This higher phase out range is intended to allow more spouses without pension coverage to not be disqualified from making a deductible IRA contribution.

Frequently Asked Tax Questions