Traditional IRA deduction
A traditional IRA lets you deduct up to $7,500 ($8,600 at 50 and over) of retirement savings from this year's income, with income limits only if you or your spouse have a workplace plan.
Figures are for the 2026 tax year.
How it works
You open a traditional IRA at a bank or brokerage and contribute cash. If you qualify for the deduction, the contribution comes off your income for the year, so you pay less tax now. The money then grows with no tax on dividends or gains until you take it out.
Withdrawals in retirement are taxed as ordinary income. Take money out before age 59½ and you usually owe income tax plus a 10% penalty. From age 73 you must take a required minimum distribution every year.
To contribute you need earned income, meaning wages or self-employment income, and you cannot contribute more than you earned. There is no upper age limit. You get the deduction whether or not you itemize.
2026 limits
$7,500
Contribution limit, under 50
$8,600
Contribution limit, 50 and over
$7,500 plus a $1,100 catch-up
April 15, 2027
Deadline for 2026 contributions
The limit covers all your IRAs together, traditional and Roth.
A contribution made between January 1 and April 15, 2027 can count for either 2026 or 2027. Tell your custodian which year you mean when you make the deposit.
Who can deduct it
How much you can deduct depends on whether you or your spouse are covered by a workplace plan such as a 401(k), and on your modified adjusted gross income (MAGI). Your W-2 tells you if you are covered: look for the Retirement plan checkbox in box 13.
If neither of you is covered, you can deduct the full amount at any income. If one of you is, the deduction shrinks across the range below and is gone at the top of it.
| Filing status | Full deduction below | No deduction above |
|---|---|---|
| Single or head of household, covered by a plan | $81,000 | $91,000 |
| Married filing jointly, you are covered | $129,000 | $149,000 |
| Married filing jointly, only your spouse is covered | $242,000 | $252,000 |
| Married filing separately, either spouse covered | $0 | $10,000 |
If your income is too high for the deduction, you can still make a nondeductible contribution, but a Roth IRA is usually the better choice as long as you are under the Roth income limits ($153,000 to $168,000 single, $242,000 to $252,000 joint).
Example
$75,000 salary, single, no workplace plan. Taxable income after the $16,100 standard deduction is $58,900. A $7,500 IRA contribution lowers it to $51,400. The whole reduction falls in the 22% bracket, which starts at $50,400, so the deduction saves $1,650 in federal tax.
How to claim it
- Deductible contributions go on the IRA deduction line of Schedule 1 (Form 1040), line 20 on recent forms. The amount lowers your AGI.
- For a partial deduction, use the worksheet in IRS Publication 590-A. Tax software does this for you.
- Nondeductible contributions go on Form 8606. File it every year you make one so the IRS has a record of the money you already paid tax on.