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Traditional IRA: How Much Can You Contribute and Deduct in 2004?

Worksheet F-D

Use this worksheet only if you are:

  • Covered by an employer-sponsored retirement plan, and
  • Receive Social Security benefits

Some fairly complicated calculations are required to determine what portion (if any) of your traditional IRA contribution you can deduct on your federal income tax return, and what portion of your Social Security benefits must be included in your taxable income. This worksheet is divided into three parts: Part 1 allows you to determine your modified adjusted gross income, to be used in Part 2 and Part 3. Part 2 allows you to determine the amount of tax-deductible contribution you can make to a traditional IRA. Part 3 allows you to compute the taxable portion of your Social Security benefits, taking into account your IRA deduction.

Worksheet Part 1: Computation of Modified Adjusted Gross Income

Filing Status (check only one box):

A. image

Married filing jointly or qualifying widow(er)
B. image Single, head of household, or married filing separately (but only if you lived apart from your spouse for the entire year)
C. image Married filing separately (if you lived with your spouse at any time during the year)

1. Enter adjusted gross income (AGI).

  • Your AGI can be found on the "adjusted gross income" line of your federal income tax return.
  • If your AGI includes any Social Security benefits from Form SSA-1099 or RRB-1099, recalculate your AGI without these benefits.
  • If, in determining your AGI, you deducted IRA contributions from your income or excluded interest from savings bonds (using Form 8815), you must add these amounts to your AGI.
  • If married filing a joint return, this amount must represent the combined AGI of you and your spouse.

$________

2. Enter the amount in Box 5 of all SSA-1099 and RRB-1099 forms.

  • If your filing status is married filing jointly, add amounts from both your forms and those of your spouse.

$________

3. Enter one-half of line (2).

$________

4. Enter the amount of any foreign earned income exclusion, foreign housing exclusion, U.S. possessions income exclusion, exclusion of income from Puerto Rico, or exclusion of employer-paid adoption expenses.

$________

5. Enter the amount of any tax-exempt interest reported on line (8b) of Form 1040 or 1040A.

$________

6. Add lines (1), (3), (4), and (5).

$________

7. Enter the amount listed below for your filing status.

  • $32,000 if you checked box A above
  • $25,000 if you checked box B above
  • $0 if you checked box C above

$________
8. Subtract line (7) from line (6). If zero or less, enter zero on this line.

$________
9. If line (8) is zero, stop here. No portion of your Social Security benefits is taxable. If line (8) is more than zero, enter the amount listed below for your filing status.
  • $12,000 if you checked box A above
  • $9,000 if you checked box B above
  • $0 if you checked box C above

$________
10. Subtract line (9) from line (8). If zero or less, enter zero.

$________
11. Enter the smaller of line (8) or line (9).

$________
12. Enter one-half of line (11).

$________
13. Enter the smaller of line (3) or line (12).

$________
14. Multiply line (10) by .85. If line (10) is zero, enter zero.

$________
15. Add lines (13) and (14).

$________
16. Multiply line (2) by .85.

$________
17. Taxable Social Security benefits to be included in modified AGI for traditional IRA deduction purposes. Enter the smaller of line (15) or line (16).

$________
18. Enter the amount of any employer-paid adoption expenses exclusion, any foreign earned income exclusion, and any foreign housing exclusion or deduction that you claimed.

$________
19. Modified AGI for determining your reduced traditional IRA deduction--add lines (1), (17), and (18). Enter here and on line (2) of Worksheet Part 2.

$________

Worksheet Part 2: Computation of Traditional IRA Deduction for Individuals Who Receive Social Security Benefits

If your federal income tax filing status is: Enter on line (1) below:
Single or head of household $45,000
Married filing jointly or qualifying widow(er) $65,000
Married filing separately $0

Caution: If you are married, did not live with your spouse at any time during the year, and file separate income tax returns, you are considered a single taxpayer for purposes of determining the tax-deductible portion of your traditional IRA contribution.

Note: Certain low- and middle-income taxpayers may also be eligible for a partial income tax credit for contributing to an IRA (traditional or Roth). If you qualify for such a credit, it is in addition to any income tax deduction you might receive for making the contribution.

1. Enter the appropriate amount from the table above.

$________

2. Enter your modified adjusted gross income (from line (19) of Worksheet Part 1).

  • If this amount is equal to or less than the amount on line (1), stop here. You can deduct the full amount of your contribution to a traditional IRA. Complete line (5) and enter the same amount on line (6).

$________

3. Subtract line (1) from line (2).

  • If this amount is $10,000 or more, stop here. You cannot deduct any portion of your traditional IRA contribution. Proceed to Worksheet Part 3.

$________

4. Enter the maximum deductible amount for 2004.

  • If you are under age 50, enter $3,000 here as the maximum deductible amount. If you are age 50 or older, enter $3,500.

$________

5. Enter the amount by which your traditional IRA deduction is reduced, calculated as follows:

Amount on Line (4) x (Amount on Line (2) - Amount on Line (1))

$10,000

  • If this amount is not a multiple of $10, reduce to the next lowest multiple of $10 (e.g., reduce $858 to $850).

$________

6. Subtract line (5) from line (4).

  • If this amount is less than $200 (but greater than $0), enter $200.

$________
7. Enter the maximum amount that you can contribute to a traditional IRA for 2004.
  • This amount is equal to the lesser of $3,000 ($3,500 if age 50 or older) or 100 percent of your taxable compensation for the year.
  • If you did not have at least $3,000 in taxable compensation for the year, see Amount You Can Contribute .

$________
8. Allowable deductible contribution: Enter the smaller of line (6) or line (7).
  • This is the maximum deductible contribution that you can make to your traditional IRA for 2004.

$________
9. Nondeductible contribution: Subtract line (8) from line (7).
  • This is the portion of your traditional IRA contribution that you cannot deduct on your 2004 federal income tax return.
  • If this amount is zero, all of your contribution is deductible.

$________
 

Worksheet Part 3: Computation of Taxable Social Security Benefits for Individuals Who Claim a Traditional IRA Deduction

Filing Status (check only one box):

A. image

Married filing jointly or qualifying widow(er)
B. image Single, head of household, or married filing separately (but only if you lived apart from your spouse for the entire year)
C. image Married filing separately (if you lived with your spouse at any time during the year)

1. Enter adjusted gross income (AGI).

  • Your AGI can be found on the "adjusted gross income" line of your federal income tax return.
  • If your AGI includes any Social Security benefits from Form SSA-1099 or RRB-1099, recalculate your AGI without these benefits.
  • If, in determining your AGI, you deducted IRA contributions from your income or excluded interest from savings bonds (using Form 8815), you must add these amounts to your AGI.
  • If married filing a joint return, this amount must represent the combined AGI of you and your spouse.

$________

2. Traditional IRA deduction(s) from line (6) of Worksheet Part 2

  • If your filing status is married filing jointly, and both you and your spouse make tax-deductible contributions to traditional IRAs, add line (6) of your Worksheet Part 2 to line (6) of your spouse's Worksheet Part 2 and enter the result here.

$________

3. Subtract line (2) from line (1).

$________

4. Enter amount in Box 5 of all SSA-1099 and RRB-1099 forms.

  • If your filing status is married filing jointly, add amounts from both your forms and those of your spouse.

$________

5. Enter one-half of line (4).

$________

6. Enter the amount of any foreign earned income exclusion, foreign housing exclusion, U.S. possessions income exclusion, exclusion of income from Puerto Rico, or exclusion of employer-paid adoption expenses.

$________

7. Enter the amount of any tax-exempt interest reported on line (8b) of Form 1040 or 1040A.

$________
8. Add lines (3), (5), (6), and (7).

$________
9. Enter the amount listed below for your filing status.
  • $32,000 if you checked box A above
  • $25,000 if you checked box B above
  • $0 if you checked box C above

$________
10. Subtract line (9) from line (8). If zero or less, enter zero on this line.

$________
11. If line (8) is zero, stop here. No portion of your Social Security benefits is taxable. If line (8) is more than zero, enter the amount listed below for your filing status.
  • $12,000 if you checked box A above
  • $9,000 if you checked box B above
  • $0 if you checked box C above

$________
12. Subtract line (11) from line (10). If zero or less, enter zero.

$________
13. Enter the smaller of line (10) or line (11).

$________
14. Enter one-half of line (13).

$________
15. Enter the smaller of line (5) or line (14).

$________
16. Multiply line (12) by .85. If line (12) is zero, enter zero.

$________
17. Add lines (15) and (16).

$________
18. Multiply line (4) by .85.

$________
19. Taxable Social Security benefits. Enter the smaller of line (17) or line (18).
  • This amount represents the taxable portion of your Social Security benefits and should be included on your federal income tax return.

$________


Prepared by Broadridge Investor Communication Solutions, Inc, Copyright 2011