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Table 9-1. Effect of Modified AGI on Deduction if You Are Covered by 2. You didn't serve more than 90 days on ac-
1
Retirement Plan at Work tive duty during the year (not counting duty
for training).
If you are covered by a retirement plan at work, use this table to determine if your modified AGI
affects the amount of your deduction. Volunteer firefighters. If the only reason you
participate in a plan is because you are a volun-
teer firefighter, you may not be covered by the
IF your filing status is... AND your modified AGI is... THEN you can take... plan. You aren't covered by the plan if both of
Single $65,000 or less a full deduction. the following conditions are met.
more than $65,000 a partial deduction. 1. The plan you participate in is established
or but less than $75,000 for its employees by:
a. The United States,
Head of household $75,000 or more no deduction. b. A state or political subdivision of a
Married filing jointly $104,000 or less a full deduction. state, or
more than $104,000 a partial deduction. c. An instrumentality of either (a) or (b)
or but less than $124,000 above.

Qualifying widow(er) $124,000 or more no deduction. 2. Your accrued retirement benefits at the
Married filing less than $10,000 a partial deduction. beginning of the year won't provide more
than $1,800 per year at retirement.
separately 2
$10,000 or more no deduction.
Limit if Covered by Employer Plan
1 Modified AGI (adjusted gross income). See Modified adjusted gross income (AGI), later. If either you or your spouse was covered by an
2 If you didn't live with your spouse at any time during the year, your filing status is considered Single for this employer retirement plan, you may be entitled
purpose (therefore, your IRA deduction is determined under the “Single” column). to only a partial (reduced) deduction or no de-
duction at all, depending on your income and
Reservists and volunteer firefighters should A defined benefit plan is any plan that isn't a your filing status.
also see Situations in Which You Aren’t Cov- defined contribution plan. In a defined benefit Your deduction begins to decrease (phase
ered by an Employer Plan, later. plan, the level of benefits to be provided to each out) when your income rises above a certain
If you aren't certain whether you were cov- participant is spelled out in the plan. The plan amount and is eliminated altogether when it
ered by your employer's retirement plan, you administrator figures the amount needed to pro- reaches a higher amount. These amounts vary
should ask your employer. vide those benefits and those amounts are con- depending on your filing status.
Federal judges. For purposes of the IRA de- tributed to the plan. Defined benefit plans in- To determine if your deduction is subject to
clude pension plans and annuity plans.
duction, federal judges are covered by an em- phaseout, you must determine your modified
ployer retirement plan. No vested interest. If you accrue a benefit for AGI and your filing status. See Filing status and
a plan year, you are covered by that plan even if Modified adjusted gross income (AGI), later.
For Which Year(s) Are You you have no vested interest in (legal right to) the Then use Table 9-1 or Table 9-2 to determine if
accrual.
Covered? the phaseout applies.
Special rules apply to determine the tax years Situations in Which You Aren’t Social security recipients. Instead of using
Table 9-1 or Table 9-2, use the worksheets in
for which you are covered by an employer plan. Covered Appendix B of Pub. 590-A if, for the year, all of
These rules differ depending on whether the the following apply.
plan is a defined contribution plan or a defined Unless you are covered under another em-
benefit plan. ployer plan, you aren't covered by an employer • You received social security benefits.
Tax year. Your tax year is the annual account- plan if you are in one of the situations described • You received taxable compensation.
below.
ing period you use to keep records and report • Contributions were made to your traditional
income and expenses on your income tax re- Social security or railroad retirement. Cov- IRA.
turn. For almost all people, the tax year is the erage under social security or railroad retire- • You or your spouse was covered by an
calendar year. ment isn't coverage under an employer retire- employer retirement plan.
Defined contribution plan. Generally, you ment plan. Use those worksheets to figure your IRA deduc-
are covered by a defined contribution plan for a Benefits from a previous employer's plan. If tion, your nondeductible contribution, and the
tax year if amounts are contributed or allocated you receive retirement benefits from a previous taxable portion, if any, of your social security
to your account for the plan year that ends with employer's plan, you aren't covered by that benefits.
or within that tax year. plan.
A defined contribution plan is a plan that Reservists. If the only reason you participate Deduction phaseout. If you are covered by an
provides for a separate account for each person in a plan is because you are a member of a re- employer retirement plan and you didn't receive
covered by the plan. Types of defined contribu- serve unit of the U.S. Armed Forces, you may any social security retirement benefits, your IRA
tion plans include profit-sharing plans, stock bo- not be covered by the plan. You aren't covered deduction may be reduced or eliminated de-
nus plans, and money purchase pension plans. by the plan if both of the following conditions pending on your filing status and modified AGI
For additional information, see Pub. 590-A. are met. as shown in Table 9-1.
Defined benefit plan. If you are eligible to par- 1. The plan you participate in is established If your spouse is covered. If you aren't
ticipate in your employer's defined benefit plan for its employees by: covered by an employer retirement plan, but
for the plan year that ends within your tax year, your spouse is, and you didn't receive any so-
you are covered by the plan. This rule applies a. The United States, cial security benefits, your IRA deduction may
even if you: b. A state or political subdivision of a be reduced or eliminated entirely depending on
your filing status and modified AGI as shown in
• Declined to participate in the plan, state, or Table 9-2.
• Didn't make a required contribution, or c. An instrumentality of either (a) or (b) Filing status. Your filing status depends pri-
• Didn't perform the minimum service re- above. marily on your marital status. For this purpose,
quired to accrue a benefit for the year. you need to know if your filing status is single or
Page 78 Chapter 9 Individual Retirement Arrangements (IRAs)