Who can contribute to a traditional IRA?

If you (or your spouse) earn taxable income and are under age 70 ½, you can contribute. It's as easy as that.

However, whether your contributions are tax deductible depends on your income and whether you have access to a work-related retirement account. Here are the guidelines for 2016:

  • If you have no retirement plan at work and you're younger than 70 ½, you can put money in (up to the annual contribution limit) and deduct the entire amount from your taxes. (If your spouse doesn't work outside the home, he or she can also invest up to the federal limit and deduct the full amount.)
  • If you do have a 401(k) or other retirement plan at work, your contribution is fully deductible only if your adjusted gross income (AGI) is less than $98,000 for a married couple filing jointly or $61,000 for an individual.
  • If you have a workplace retirement plan, the deduction for your traditional IRA contribution is phased out completely if your AGI is $118,000 or more (married couple filing jointly) or $71,000 or more (individual), or $10,000 for a married person filing separately.
  • If you're not covered by a workplace plan but your spouse is, your contribution is fully deductible if your combined income is less than $184,000 and gets phased out at $194,000 or more.

For more on whether to choose a traditional IRA or a Roth IRA, see Which is better for me, a Roth or traditional IRA?

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