Changed jobs in August. Current employer does not have retirement or 401k plan. Previous employer had a 401k plan which I contributed to until I left the company, but no defined retirement plan. My modified AIG falls below phase out threshold. Can I deduct an IRA contribution for myself and spouse for 2007?
Yes. You were "covered" by a retirement plan in 2007 (the previous employer's 401(k)), but all that means is that you're subject to the AGI phaseouts. Since your income falls below the phaseout level, your IRA contributions are fully deductible. See IRS Publication 590.
-- Phil Marti Clarksburg, MD
If your AGI is below the threshold you can deduct your IRA contribution regardless of whether you were covered by an employer plan.
-- Barry Margolin, snipped-for-privacy@alum.mit.edu Arlington, MA
If you have a pension plan at any time during the year, you are subject to the AGI limitations. We can't determine whether your spouse qualifies without the AGI limit because you didn't state whether he/she participates in one through his/her employer.
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