2011 IRA Deduction Rules & Income Limits

IRA contributions are tax deductible depending on your income and whether you are covered by a retirement plan (such as a 401k plan) at work. Each year the IRS increases these income thresholds to keep up with inflation. The 2011 IRA deduction rules are as follows:

2011 IRA Deduction if you are covered by a plan at work:

If you are a married tax filer filing jointly, or you are a qualified widower, then you get a full 2011 IRA deduction if your income is less than $90,000. If your income is more than $90,000 but less than $110,000 then you get a partial deduction. If, however, your income is above $110,000 then you get no tax deduction for your IRA contribution.

If you are single then you get a full 2011 IRA deduction if your income is less than $56,000. If your income is more than $56,000 but less than $66,000 then you get a partial deduction. If you have income above $66,000 then no deduction for you.

2011 IRA Deduction if you are NOT covered by a plan at work:

If you are married and your spouse is covered at work then you get a full 2011 IRA deduction if your joint gross adjusted income is less than $169,000. If your income is between $169,00 and less than $179,000 then you get a partial deduction. However, if your income is $179,000 and above then your IRA contributions are not tax deductible. You are better off maxing out your 401k contributions instead.

If you are single then you get a full 2011 IRA deduction no matter how much your income is.

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