The most you can contribute to an IRA is $3,000 per year per person (or $3,500 if you are over 50 years old).
If you are covered by a retirement plan at work, you must use the "IRA Deduction Worksheet" on page 27 of the Instructions for Form 1040 (PDF). Use this Worksheet to calculate what portion of your IRA contribution is deductible.
Tax Tip! If your traditional IRA contribution is not deductible, consider converting it to a Roth IRA. A Roth IRA is much the same as a nondeductible IRA, but has fewer record-keeping requirements.
