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If you’re covered by an employer-sponsored retirement plan at work, that $2,000 (or $4,000, for you and your spouse) might be only partially deductible or not tax-deductible at all.
It’s not tax-deductible at all if:
H both you and your spouse are covered by an employer- sponsored retirement plan, you are filing a joint tax return, and the total of the adjusted gross income for the two of you is $50,000 or more; or
1 you are single, covered by an employer-sponsored retirement plan, and your adjusted gross income is $35,000 or more.
If your adjusted gross income is less than the amounts just indicated, you may still be able to deduct at least a portion of your IRA. And if your only retirement option is an IRA, I urge you to invest not only in that vehicle, but also more on your own, taxes notwithstanding. Later in this chapter and the next I’ll tell you how.
What’s the Difference between a 40 1(k) and an IRA?
Well, it’s about as much as $7,500 a year of possible income you can put away. The maximum you can put into an IRA for yourself is $2,000 a year. This is a big reason to push for a 401(k), where the max is $9,500. Even with a SIMPLE you can possibly put away $4,000 more a year than you can with an IRA.

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