APPENDIX B. (Continued)
| Worksheet 2 |
| Computation of Traditional IRA Deduction |
| (For use only by taxpayers who
receive social security benefits) |
|
IF your filing status is ... |
|
AND your modified AGI is over ... |
|
THEN enter on line 1 below ... |
|
married filing jointly or qualifying widower(er) |
|
$54,000* |
|
$64,000 |
|
married filing jointly (you are not covered by an employer plan but your spouse is) |
|
$150,000* |
|
$160,000 |
|
single, or head of household |
|
$34,000* |
|
$44,000 |
|
married filing separately** |
|
$ 0* |
|
$10,000 |
|
*If your modified AGI is not over
this amount, you can take an IRA deduction for your contributions of up to the lesser of
$3,000 ($3,500 if you are 50 or older) or your taxable compensation. Skip this worksheet
and proceed to Worksheet 3. **If you did not live with your spouse at any time
during the year, consider your filing status as single. Note: If you were
married and you or your spouse worked and you both contributed to IRAs, figure the
deduction for each of you separately. |
| 1. |
Enter the applicable amount from above |
$64,000 |
| 2. |
Enter your modified AGI from Worksheet 1, line 19 |
59,450 |
| Note: If line 2 is equal to or more than the amount on line 1, stop
here; your traditional IRA contributions are not deductible.
Proceed to Worksheet 3. |
|
| 3. |
Subtract line 2 from line 1 |
4,550 |
| 4. |
Multiply line 3 by 30% (.30) (by 35% (.35) if age 50 or older at the end
of 2002). If the result is not a multiple of $10, round it to the next highest multiple of
$10. (For example, $611.40 is rounded to $620.) However, if the result is less than $200,
enter $200. |
1,600 |
| 5. |
Enter your compensation minus any deductions on Form 1040, line 29
(one-half of self-employment tax) and line 31(self-employed SEP, SIMPLE, and qualified
plans). (If you are the lower income spouse, include your spouse's compensation reduced by
his or her traditional IRA and Roth IRA contributions for this year |
53,500 |
| 6. |
Enter contributions you made, or plan to make, to your traditional IRA for
2002, but do not enter more than $3,000 ($3,500 if 50 or older) |
3,500 |
| 7. |
Deduction. Compare lines 4, 5, and 6. Enter the smallest amount
here (or a smaller amount if you choose). Enter this amount on the Form 1040 or 1040A line
for your IRA. (If the amount on line 6 is more than the amount on line 7, complete line
8.) |
1,600 |
| 8. |
Nondeductible contributions. Subtract line 7 from line 5 or 6,
whichever is smaller. Enter the result here and on line 1 of your Form 8606, Nondeductible
IRAs. |
1,900 |
