By Caren P. Williams, CPM®
Financial Advisor and Senior Vice President, Morgan Stanley

The deadline for filing your 2017 tax return is April 17, 2018, assuming you don’t file for an extension.  If you are still working on your return and need a deduction to reduce your tax burden, consider contributing to a Traditional IRA as you may qualify for a deduction.

Who is eligible to contribute to a Traditional IRA?

Anyone under the age of 70 ½ who has earned income can contribute to a Traditional IRA.

How much can I contribute?

For 2017 and 2018, you can contribution 100% of your earned income up to $5,500 for those under the age of 50, and $6,500 for those 50 and older.

Who qualifies for a deductible IRA contribution?

You may be eligible for a tax deduction for a Traditional IRA contribution (depending on your income, tax filing status and whether you are covered by a retirement plan at work such as a 401k, 403b, etc.).  If you were NOT covered by a retirement plan at work last year, see the table below as provided by to determine your eligibility for a deduction on your 2017 IRA contribution:

If you were NOT covered by a retirement plan at work (2017):

Therefore, if you are single and not covered by a retirement plan at work, you can qualify for a full deduction on your contribution to a Traditional IRA.

And, if you were covered by an employer’s retirement plan last year, you may still be eligible for a deductible contribution to your Traditional IRA.  See the table below from to determine if your contribution may qualify for deductibility:

If you WERE covered by a retirement plan at work (2017):

Therefore, as a single filer – even if you were covered by a retirement plan at work, you can still receive a full deduction if your MAGI is under $62,001, and a partial deduction if your income is between $62,001-$71,999.

If you are married, and one spouse was covered by a retirement plan at work, the individual not covered by a plan can still deduct a full Traditional IRA contribution if your joint MAGI is $99,000 or less.

Remember, since you are receiving a tax deduction now, withdrawals from Traditional IRAs during your retirement years are subject to income tax at your marginal tax bracket.  If withdrawn prior to age 59 ½, you will be subject to an additional 10% penalty for early withdrawal, unless you qualify for certain exceptions.

Lastly, remember an IRA is for RETIREMENT.  Be sure to think about your Traditional IRA as Long-Term Savings.  In addition to the possible tax deduction today, these funds can be especially helpful if you don’t have access to a retirement plan at work or if you want to supplement your other retirement savings.

All information is from unless specified.


Caren Williams is a Financial Advisor with Morgan Stanley Global Wealth Management in Nashville, and may be reached at


This material does not provide individually tailored investment advice.  It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it.  The strategies and/or investments discussed in this material may not be suitable for all investors.  Morgan Stanley Wealth Management recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a Financial Advisor.  The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. 


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