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Publication 554

Chapter 3
Adjustments to Income(p21)

You may be able to subtract amounts from your total income (Form 1040, line 22 or Form 1040A, line 15) or total effectively connected income (Form 1040NR, line 23) to get your adjusted gross income (Form 1040, line 37; Form 1040A, line 21; or Form 1040NR, line 36). Some adjustments to income follow.
There are other items you can claim as adjustments to income. These adjustments are discussed in your tax return instructions.

Individual Retirement Arrangement (IRA) Contributions and Deductions(p21)

This section explains the tax treatment of amounts you pay into traditional IRAs. A traditional IRA is any IRA that is not a Roth or SIMPLE IRA. Roth and SIMPLE IRAs are defined earlier in the IRA discussion under Retirement Plan Distributions. For more detailed information, see Publication 590.


An IRA is a personal savings plan that offers you tax advantages to set aside money for your retirement. Two advantages of a traditional IRA are:
Although interest earned from your traditional IRA generally is not taxed in the year earned, it is not tax-exempt interest. Do not report this interest on your tax return as tax-exempt interest.

General limit.(p21)

The most that can be contributed for 2010 to your traditional IRA is the smaller of the following amounts.
Contributions to spousal IRAs.(p21)
In the case of a married couple filing a joint return for 2010, up to $5,000 ($6,000 for each spouse age 50 or older by the end of 2010) can be contributed to IRAs on behalf of each spouse, even if one spouse has little or no compensation.
For more information on the general limit and the spousal IRA limit, see How Much Can Be Contributed? in Publication 590.
Deductible contribution.(p21)
Generally, you can deduct the lesser of the contributions to your traditional IRA for the year or the general limit (or spousal IRA limit, if applicable) just explained. However, if you or your spouse was covered by an employer retirement plan at any time during the year for which contributions were made, you may not be able to deduct all of the contributions. Your deduction may be reduced or eliminated, depending on your filing status and the amount of your income. Your deduction may also be affected by social security benefits you received. For more information, see Limit if Covered by Employer Plan in Publication 590.
Nondeductible contribution.(p21)
The difference between your total permitted contributions and your IRA deduction, if any, is your nondeductible contribution. You must file Form 8606, Nondeductible IRAs, to report nondeductible contributions even if you do not have to file a tax return for the year.