The IRS on Monday, Oct. 26, increased the 2021 income ranges that determine whether taxpayers are eligible to make deductible contributions to traditional individual retirement arrangements (IRAs), contribute to Roth IRAs and claim the saver’s credit. Under Notice 2020-79, most other employee retirement plan contribution limits will remain the same.
Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions, including income limitations. If during the year either the taxpayer or his or her spouse have a retirement plan at work, the deduction may decrease, or phase out, above certain adjusted gross income levels until it ends. If neither has a work retirement plan, the phaseouts of the deduction do not apply. See the 2021 phaseout ranges here.