Can you deduct 401k and IRA contributions with standard deduction

Can I claim both the 401k and/or IRA deduction with the standard deduction? To claim the IRA or 401k contributions, a taxpayer doesn’t need to itemize deductions because the deduction for these contributions aren’t exactly seen as a separate deduction.

You can deduct these expenses by not itemizing deductions. This is because you won’t use Schedule A – Itemized Deductions to deduct retirement account contributions.

You can simply go ahead and claim the 401k deduction by skipping itemizing. The tax form you need is Schedule 1 – Additional Income and Adjustments to Income which doesn’t require you to itemize deductions. You can simply take the standard deduction and the 401k deductions.

Schedule 1 is kind of mandatory to file anyways as you will need to fill it out to determine your adjusted gross income. So one doesn’t have to itemize deductions in order to take the 401k or IRA contributions deduction.

However, the deduction you’re eligible to take entirely depends on your modified adjusted gross income and whether or not you or your spouse is covered by a retirement plan at work. So if you have both 401k and IRA, the deduction you get is mostly restricted based on your modified adjusted gross income.

FILING STATUSMODIFIED ADJUSTED GROSS INCOMEELIGIBLE FOR
Single or Head of HouseholdLess than $65,000
$65,001 to $75,000
$75,001 or more
Full Deduction
Partial Deduction
No Deduction
Married Filing Jointly or Qualifying Widow(er)Less than $104,000
$104,000 to $124,000
$124,001 or more
Full Deduction
Partial Deduction
No Deduction
Married Filing SeparatelyLess than $10,000
$10,001 or more
Partial Deduction
No Deduction

The above chart shows if you can claim the IRA deduction if you’re covered by a retirement plan at work based on modified adjusted gross income and if so, the portion of it. If you’re not covered by a retirement plan at work though, this gets very different. You can deduct any of your contributions if you only have IRA. However, if you’re filing a joint return but your spouse is covered by a retirement plan at work or you are, but your spouse isn’t, you might get a reduced deduction. The modified adjusted gross income limits for these families is as follows.

Are you or your spouse is covered by a retirement plan at work?Modified Adjusted Gross IncomeDeduction
YesLess than $196,000
$196,000 – $206,000
More than $206,000
Full Deduction
Partial Deduction
No Deduction

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