Deductible IRA Contribution

In general, you can deduct up to $4,000 in contributions made for 2007 to a traditional IRA. The contribution must be made before April 15, 2008. If you are married filing a joint return, you can also deduct up to $4,000 in contributions made for 2007 to a traditional IRA for your spouse. Roth IRA contributions are not deductible.

If you are age 50 years or older, your contribution limit is $5,000.

Your maximum deduction may be lower if any of the following are true:

• You (or your spouse, if married filing jointly) were covered by a retirement plan such as a 401(k) plan and your income was over $50,000 ($80,000 if married filing a joint return or a qualifying widow(er); any amount if married filing separately and you lived with your spouse at any time in 2007).

• Your earned income was less than your contribution limit.