20 — IRA Deduction Updated for tax year 2025

Easy to overlook

Roth IRA contributions are not deductible Roth IRA contributions are made with after-tax dollars and do not reduce your taxable income. ¹ They do not go on line 20. Only traditional IRA contributions can produce a deduction. Filers who contribute to a Roth sometimes enter the amount here, creating a deduction they are not entitled to. The tax benefit of a Roth comes at withdrawal (tax-free), not at contribution. General filing pattern — Roth contributions claimed as deduction

Employer plan coverage triggers income-based phaseouts If you are covered by an employer retirement plan (401(k), 403(b), pension), your traditional IRA deduction phases out based on modified AGI. For 2025, the phaseout is $79,000 to $89,000 for single filers and $126,000 to $146,000 for married filing jointly (when the contributor is covered). ² If only your spouse is covered by an employer plan, the phaseout is $236,000 to $246,000. Above the upper limit, no deduction is allowed, but you can still make a nondeductible traditional IRA contribution. IRS Publication 590-A — Contributions to IRAs

Nondeductible contributions require Form 8606 If your income exceeds the phaseout limits, you can still contribute to a traditional IRA — the contribution is just nondeductible. You must file Form 8606 to report nondeductible contributions and track your basis in the IRA.³ Without Form 8606, the IRS assumes all your traditional IRA money is pretax. When you take distributions in retirement, you pay tax on the full amount instead of only the earnings. Filing Form 8606 every year you make a nondeductible contribution protects you from double taxation. IRS Publication 590-A — Contributions to IRAs