The ability to take a deduction for a contribution to an IRA whether it be a regular IRA or a Roth is governed by several factors. First you must have earned income. If either you or your spouse is covered by a retirement plan at work then the amount of the deduction is limited based on gross income. The reason you could not take the deduction for married filing separate is due to a deduction being limited to $10,000 or less in earnings. A deduction for earnings that exceed the $10,000 amount are not allowed because of the inability of the tax return to accurately reflect gross earnings and coverage of retirement plans at work. Basically if you and your spouse are both covered by retirement plans at work then you can take a full deduction with income of less than $90,000 , combined income. A partial deduction is taken for gross income levels between $90,000 and $110,000, at which level the deduction is not allowed. If your spouse is covered by a retirement plan but you or not then the levels increase to ma range of 169,000 to 179,000. Full amount deductible up to 169,000 which then starts to be reduced until gross income level of 179,000 at which no deduction is allowed. The Roth deduction will be reduced for any amounts claimed under a regular IRA but also may be increased after attaining age 50. The income levels are indexed and change yearly based on the CPI. For full information and explanation refer to IRS publication 590. This publication is thorough and a complete resource for IRAs.
425 weeks ago