Consider two married individuals in the following scenario for 2017:
- Married filing jointly with MAGI = $109,000
- Both people are participants in an employee-sponsored plan
- Both age 35
- They both want to contribute to their individual, traditional IRA but realize they will only receive a partial deduction.
For 2017, that looks like exactly half of the $5,500 per individual is deductible. Do deductibility limits apply to the first $2,750 or 50% of IRA contribution up to $5,500? In other words, if they want to maximize deductions and minimize non-deductible contributions, do they each only need to contribute $2,750 each?