Who can make a deductible contribution to a traditional IRA?
A single taxpayer, or if married couple filing jointly, and one spouse is considered an active participant in a qualified retirement plan and the other spouse is not, the spouse that is not an active participant in an employer sponsored retirement plan may make a fully deductible IRA contribution provided their combined adjusted gross income is $200,000 or less. However for the couple with only person participating in an employer sponsored plan, the deduction for the nonparticipant spouse is phased out as joint AGI rises from $150,000 to $160,000. If the single taxpayer is an active participant in an employer plan, but has an adjusted gross income (AGI) in 2006 of less than $50,000, an IRA is fully deductible and a reduced portion is deductible up to an AGI of $60,000, at which point is completely non deductible. The same holds true for a married couple filing jointly with an AGI of less than $85,000 and the deduction is completely phased out at an AGI of $75,000. Or stated another way
