The contribution limit to your traditional IRA for 2008 increased to the smaller of the following amounts:

• $5,000, or
• Your taxable compensation for the year.

If you were age 50 or older before 2009, the most that can be contributed to your traditional IRA for 2008 is the smaller of the following amounts:

• $6,000, or
• Your taxable compensation for the year.

For more information, see How Much Can Be Contributed? in this chapter.

For 2008, if you were covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is:

• More than $85,000 but less than $105,000 for a married couple filing a joint return or a qualifying widow(er),
• More than $53,000 but less than $63,000 for a single individual or head of household, or
• Less than $10,000 for a married individual filing a separate return.

For 2008, if you either lived with your spouse or file a joint return, and your spouse was covered by a retirement plan at work, but you were not, your deduction is phased out if your modified AGI is more than $159,000 but less than $169,000. If your modified AGI is $169,000 or more, you cannot take a deduction for contributions to a traditional IRA. See How Much Can You Deduct? in this chapter.

Economic stimulus payments directly deposited in your traditional IRA in 2008 may be withdrawn tax-free and penalty-free. See Tax-Free Withdrawals of Economic Stimulus Payments under When Can You Withdraw or Use Assets? in this chapter.

If you received qualified settlement income in connection with the Exxon Valdez litigation, you may roll over the amount received, or part of the amount received, to your traditional IRA. For more information, see Rollover of Exxon Valdez Settlement Income in this chapter.

For 2009, if you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is:

• More than $89,000 but less than $109,000 for a married couple filing a joint return or a qualifying widow(er),
• More than $55,000 but less than $65,000 for a single individual or head of household, or
• Less than $10,000 for a married individual filing a separate return.

If you either live with your spouse or file a joint return, and your spouse is covered by a retirement plan at work, but you are not, your deduction is phased out if your modified AGI is more than $166,000 but less than $176,000. If your modified AGI is $176,000 or more, you cannot take a deduction for contributions to a traditional IRA. See How Much Can You Deduct? in this chapter.

No minimum distribution is required from your traditional IRA for 2009. See Temporary waiver of required minimum distribution rules in this chapter.

This chapter discusses the original IRA. In this publication the original IRA (sometimes called an ordinary or regular IRA) is referred to as a "traditional IRA." The following are two advantages of a traditional IRA:

• You may be able to deduct some or all of your contributions to it, depending on your circumstances.
• Generally, amounts in your IRA, including earnings and gains, are not taxed until they are distributed.

A traditional IRA is any IRA that is not a Roth IRA or a SIMPLE IRA.