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Tax breaks - full and partial deductions
There are income thresholds for full deduction of your Traditional IRA
contributions and a formula to determine if you can make a partial deduction
of your contributions if your income exceeds the limits for full deductions.
If you are a taxpayer with a modified Adjusted Gross Income (AGI)1 less than the thresholds
listed below you are entitled to a full deduction of your IRA contributions.
The table below applies to you if:
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You are a single taxpayer and an active participant in a retirement plan. |
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You are a married taxpayer filing jointly and both you and your spouse are active participants
in a retirement plan. |
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Income Thresholds by Tax Year |
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Tax Year |
Single Taxpayer (AGI*1) |
Married Taxpayers Filing Jointly (AGI*1) |
|
2001 |
$33,000 |
$53,000 |
|
2002 |
$34,000 |
$54,000 |
|
2003 |
$40,000 |
$60,000 |
|
2004 |
$45,000 |
$65,000 |
|
2005 |
$50,000 |
$70,000 |
|
2006 |
$50,000 |
$75,000 |
|
2007 |
$52,000 |
$83,000 |
|
2008 |
$53,000 |
$85,000 |
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* AGI is the Adjusted Gross Income on your tax return. |
1The modified AGI is used for calculating IRA contribution and
deduction limits. Please refer to Internal Revenue Code Publication 590
or consult with your tax advisor.
If you are a married taxpayer filing jointly, but only one of you is an
active participant in a retirement plan, the threshold for married taxpayers
filing jointly applies to the active participant only. The spouse who is not
an active participant in a retirement plan is entitled to a full IRA deduction
if the couple's combined modified AGI is less than $156,000 for 2007 and
$159,000 for 2008, or a partial deduction if the combined modified AGI is
less than $166,000 for 2007 and $169,000 for 2008. Please consult with your tax
advisor to determine the applicable deduction for your situation.
Long-term tax advantages
Whether or not you are eligible to deduct all or part of
your Traditional IRA contributions from your federal income taxes, all of the
interest and/or investment earnings credited to your account accumulate tax
deferred until they are withdrawn. Mutual of America's Traditional IRA is a
variable accumulation annuity contract and does not provide additional
income-tax deferral advantages beyond those available in an IRA. You should
carefully consider an annuity contract's other features before making a
decision.
Learn more about Contributions & Withdrawals.
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