Traditional IRA Tax Deduction: Income Limits and Rules

If you're an active participant in a 401(k), 403(b), or other employer plan, your Traditional IRA deduction phases out. For 2026, the phase-out range for single filers is $81,000–$91,000. For married filing jointly where the contributor is covered, the range is $129,000–$149,000. Below the phase-out start, the full contribution is deductible. Above the phase-out end, no deduction is available. Within the range, the deduction is reduced proportionally.

If you're not covered by a workplace plan but your spouse is, you can still deduct Traditional IRA contributions, but the deduction phases out at a higher income range. For 2026, the phase-out for a non-covered spouse with a covered spouse filing jointly is $242,000–$252,000.

If you're married filing separately and covered by a workplace plan, the phase-out range is $0–$10,000 — this range is not adjusted for inflation and remains fixed by statute.

If your income exceeds the phase-out range, you can still contribute to a Traditional IRA — the contribution just won't be deductible. This is called a nondeductible Traditional IRA contribution. You'll need to file Form 8606 to track the after-tax basis so you don't pay tax on it again when you withdraw. Nondeductible contributions are the starting point for the Backdoor Roth strategy.

If you can deduct Traditional IRA contributions, the choice between Traditional and Roth depends on whether you expect your tax rate in retirement to be higher (choose Roth) or lower (choose Traditional) than your current rate. If you can't deduct Traditional contributions, a Roth IRA is usually better — unless your income is too high for direct Roth contributions, in which case the Backdoor Roth is the path.