I am married filing jointly, and we are making above $181k (above IRA tax deduction limit). However, after 401(k) contributions and charities, we are well below $181k.

Do we qualify for a fully tax deductible traditional IRA?

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    No deduction if you have access to an employer 401(k) and have household income over $118,000 for 2015. IRS Link -> irs.gov/Retirement-Plans/… – quid Feb 26 '16 at 7:57
  • @quid: Actually, either you or your employer has to contribute to the 401(k) during the year for it to affect your deductions. Having one that is not contributed to doesn't count. – user102008 Jul 9 '16 at 9:01

Contributions to IRAs are covered in IRS Publication 590-A.

The income used to determine IRA eligibility is the modified adjusted gross income (modified AGI). Worksheet 1-1 inside Pub 590-A shows how that value is calculated. It is the adjusted gross income (AGI) from line 38 of your 1040 with some additional things added in. This amount is after your 401(k) contributions are taken out, but before your charitable giving is taken out. So your 401(k) contributions will reduce your income for this purpose, but your charitable giving will not.

The income limits for the IRA contribution deduction if you are covered by a 401(k) at work are in Table 1-2. For married filing jointly, there is no IRA deduction if your modified AGI is above $118,000. Between $98k and $118k, there is a partial deduction you can take that is calculated on Worksheet 1-2.

Having said that, this assumes that it is your 401(k) at your employer, and you are considering contributing to your IRA. However, if your spouse has earned income, but does not have a 401(k) at his or her place of employment, your spouse could deduct contributions to his or her IRA if your modified AGI is less than $183k, according to Table 1-3.

Note: These income limits are all for tax year 2015. The 2016 tax year limits changed slightly, and can be seen here and here.

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