Size

• Your deduction cannot exceed the annual contribution limit, which changes to reflect inflation. As of 2010, the maximum contribution equals $5,000 if you are under 50 and $6,000 if you are 50 or older.
  
  

Considerations

• Your traditional IRA contribution will not be deductible if you can contribute to a retirement plan offered by your employer, such as a 401k plan, and your modified adjusted gross income exceeds the annual limits. These limits vary by filing status. For example, in 2010, you cannot deduct any of your traditional IRA contributions if you are single and covered if your MAGI exceeds $66,000. The limit for married couples filing jointly is $109,000.
  
  

Warning

• You cannot deduct contributions made to a Roth IRA. Roth IRAs are after-tax retirement accounts, meaning that the contributions cannot be deducted, but qualified withdrawals can be taken tax-free.