Types

• You can usually deduct contributions made to traditional IRAs, as traditional IRAs are tax-deferred accounts. You cannot deduct contributions made to Roth IRAs, however, because Roth IRAs are after-tax accounts.
  
  

Warning

• You cannot deduct traditional IRA contributions if you or your spouse has access to a retirement plan through an employer and your modified adjusted gross income exceeds the annual limits. These limits vary by filing status and change each year. The current limits appear in IRS Publication 590.
  
  

Considerations

• If you have a low enough income, your IRA contribution can qualify you for the Retirement Savings Credit. This credit allows you to reduce the taxes you owe--rather than just reducing your taxable income--by a percentage of your IRA contribution. All IRA contributions, including Roth IRA contributions, count for this tax credit.