Is My IRA Contribution Tax Deductible if My Spouse Has a 401(k)?

Your filing status, your income, and the types of retirement accounts you have determine what contributions are deductible.

You can contribute to a traditional IRA account even if you or your spouse also participate in a retirement plan at work. Whether your IRA contributions are tax deductible depends on your modified adjusted gross income (MAGI) for the tax year.

When is an IRA contribution tax deductible?

Here are the situations where you can deduct the contributions to your IRA.

1. You are married, your spouse has a 401(k), and your MAGI is below the threshold

In 2022, if you are married, filing jointly and your spouse has a 401(k), you can take the full deduction for your IRA contribution as long as your MAGI is less than $204,000.

If your MAGI is between $204,000 and $214,000, you can take a partial deduction.

2. You are married, you have a 401(k), and your MAGI is below the threshold

If you are married, filing jointly, and you have a 401(k), you can take the full deduction for your contribution to a traditional IRA as long as your MAGI is $109,000 or less.

In this situation, if your MAGI is between $109,000 and $129,000, you can take a partial deduction.

3. You are single, head of household, or a qualifying widower

If you have a 401(k) or other retirement plan at work, you can take the full deduction if your MAGI is $68,000 or less.

If your MAGI is between $68,000 and $78,000, you can take a partial deduction.

Note that in all of these scenarios, the workplace retirement plan doesn't have to be a 401(k). That's just the kind that most people have. These rules also apply when you or your spouse has a profit-share, SEP, SARSEP, SIMPLE IRA, pension plan, or certain other kinds of plan. The way to know whether you're covered by a retirement plan is to look for a check in Box 13 on your W-2.

When is an IRA contribution NOT tax deductible?

You won't always be able to deduct IRA contributions.

Your IRA is a Roth

Contributions to a Roth IRA are not tax deductible. You will make these contributions with after-tax dollars. A Roth is a good alternative to a traditional brokerage account.

The main benefit of a Roth IRA is that growth is not taxed, and when you are retirement age, withdrawals are not taxed. A downside is that you cannot access the funds before you are 59 1/2 years old or you'll be subject to a financial penalty.

If, on the other hand, you put the money into a traditional brokerage account, you'll pay taxes on your earnings but you can make withdrawals whenever you want to.

Your income (single filers) or your combined income (joint filers) exceeds thresholds

If either your or your spouse is covered by a retirement plan at work and your combined income exceeds the threshold set by the IRS, you may not take the full tax deduction for your IRA contributions.

• For married taxpayers filing jointly, the limit is $129,000 if you have a 401(k), and $214,000 if your spouse has a 401(k).
• For single taxpayers, the limit is $78,000.

READ MORE: Best Tax Software

IRS contribution limits for 2022

In 2022, you can contribute a total of up to $6,000 ($7,000 if you are 50 or older) to your IRA accounts. This is a combined limit that applies to the sum of all of your contributions to all of your IRA accounts. So, for example, if you have a Roth IRA and a traditional IRA, your limit is not doubled.

Anyone can contribute to a traditional IRA, but only taxpayers with a MAGI under $144,000 (single) or $214,000 (married filing jointly) can contribute to a Roth.

The IRA contribution limit is in addition to the $20,500 that you can contribute to a 401(k) if you have one ($27,000 if you are 50 or older).

Also, remember that these limits apply to your contributions to your IRA. If you're married, your spouse can also have an IRA account, subject to the same rules and limits.