Traditional IRA: Eligibility vs. Deductibility

When deciding whether to make a Traditional IRA contribution, the IRA owner must consider if they are eligible and if so, will their contribution be tax deductible. One of the most frequently asked IRA questions is; what is the difference between eligibility and deductibility?

An IRA owner must have compensation (income earned in exchange for services performed) which can be satisfied by either the IRA owner or by a spouse if married and filing a joint federal income tax return. There are three determining factors to be qualified to make a tax-deductible contribution including active participation in an employer-sponsored retirement plan, marital status, and modified adjusted gross income. If an individual is an active participant, or if they are married to an active participant, the deductibility of an IRA contribution is reliant on the taxpayer’s modified adjusted gross income (MAGI). For questions on MAGI seek the advice of a tax professional.


If you have any questions, please call one of our IRA experts at 800-821-5104.

  • Al Kauffman, Certified IRA Professional, at ext. 2840
  • Michelle Roxbury, Certified IRA Professional, at ext. 2876
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