LIMITS ON DEDUCTING CONTRIBUTIONS IF YOU ARE SINGLE OR MARRIED AND FILING SEPARATELY

In the case of single persons covered by other employer retirement plans, deductibility of IRA contributions is limited by their adjusted gross income. The amount you can deduct is phased out as your AGI climbs above $50,000 (in 2005).

Here is how it works for single people:

For each $50 above $50,000, your deduction is reduced by $10. At $60,000, deductibility drops to $0. For example, if your AGI is $50,100 in 2005, the maximum you can deduct is $3,980.

For a married individual filing separately and where either spouse participates in an employer-sponsored retirement plan, the phase-out begins at $0. So, at $10,000 of income, no deduction is permitted for an IRA contribution.

IRA holders who are married and filing jointly can find their deductibility restrictions on the next screen.