Answer:
A taxpayer's contribution to a traditional Individual Retirement Account (IRA) may be non-deductible if the taxpayer or their spouse is covered by a retirement plan at work and their income exceeds certain limits. The income limits for determining the deductibility of traditional IRA contributions are set by the IRS each year and depend on the taxpayer's tax filing status and the presence of a retirement plan at work.
For example, in 2021, if you are single and you are covered by a retirement plan at work, you can only claim a full deduction for your traditional IRA contribution if your modified adjusted gross income (MAGI) is less than $66,000. If your MAGI is between $66,000 and $76,000, you can claim a partial deduction. If your MAGI is above $76,000, you cannot claim a deduction for your traditional IRA contribution.
If you are married and you are covered by a retirement plan at work, the income limits are slightly higher. For example, in 2021, if you are married and filing jointly, you can only claim a full deduction for your traditional IRA contribution if your MAGI is less than $105,000. If your MAGI is between $105,000 and $125,000, you can claim a partial deduction. If your MAGI is above $125,000, you cannot claim a deduction for your traditional IRA contribution.
If you are not covered by a retirement plan at work but your spouse is, the income limits for determining the deductibility of your traditional IRA contribution are based on your spouse's coverage.
It's important to note that these income limits are subject to change each year, so it's a good idea to check with the IRS or a tax professional to determine whether your contribution to a traditional IRA will be deductible.
Step-by-step explanation: