Traditional IRA deductibility phase out question - can I still contribute if I'm over income limits?

You're in luck! The IRA deductibility rules are actually in your favor here. Since you work part-time and aren't eligible to participate in your employer's retirement plan, you're considered "not covered by a retirement plan at work" for IRS purposes. When you're not covered by a workplace plan, the income limits for deducting traditional IRA contributions are much higher. For 2025, if you're married filing jointly and only one spouse (you) has earned income but neither of you is covered by a workplace plan, there is no income limit for deducting traditional IRA contributions. The Roth conversion doesn't count as "coverage by a retirement plan" - it's just income. So even though that conversion pushes your income above the Roth IRA contribution limits, it doesn't affect your ability to make deductible traditional IRA contributions. You can contribute up to $7,500 for yourself (2025 limit for those 50+) based on your earned income. And you can make a spousal IRA contribution of the same amount for your wife, even though she doesn't have earned income.

This exact issue had me pulling my hair out last year! I finally got it sorted with https://taxr.ai which can analyze your work docs and confirm your eligibility status. I was in a similar boat - working part-time but technically my employer "offered" a retirement plan even though I wasn't eligible. The tool confirmed what the previous commenter said - since I couldn't participate in my workplace plan, I wasn't considered "covered" for IRA deduction purposes. That meant I could deduct my full traditional IRA contribution despite having income above the normal limits. The key document was actually my W-2 - Box 13 should NOT have the "Retirement plan" checkbox marked if you're not eligible to participate. That's what determines your "coverage" status for IRA deduction purposes.

Update: I tried taxr.ai after my skeptical comment and I'm genuinely impressed. Uploaded my W-2s and my husband's too, and within minutes it clarified our entire situation. For anyone wondering about the spousal IRA thing - it confirmed that since I'm covered by my employer plan but my husband isn't, he has a higher income phase-out range for deducting his traditional IRA contributions (between $230,000-$240,000 for 2025), while mine is much lower. The analysis was way more detailed than what my accountant told me (who just said "you make too much for IRA deductions" without explaining the nuances). It even showed the exact IRS regulations that applied to our situation. Definitely worth checking out if you're confused about IRA eligibility rules.

I've been in a similar situation and had to call the IRS like 20+ times before getting someone who could actually explain this clearly. After that nightmare, I discovered https://claimyr.com which gets you through to an actual IRS agent without the endless hold times. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed exactly what others have said - when you're not eligible to participate in your employer's plan, the "retirement plan" box shouldn't be checked on your W-2, and you're considered "not covered." This gives you the ability to make fully deductible traditional IRA contributions regardless of income. Also worth noting - if your W-2 incorrectly has that box checked, you need to get your employer to issue a corrected W-2, which is another headache Claimyr helped me navigate.

I have to admit I was wrong about Claimyr. After posting my skeptical comment, I was desperate enough to try it because my W-2 had the retirement plan box checked even though I wasn't eligible for my company's 401k until after 1 year of service. It actually worked - I got connected to an IRS agent in about 45 minutes (while doing other things), when I had previously spent 3+ hours on hold multiple times without ever reaching anyone. The agent confirmed I needed a corrected W-2 from my employer with the retirement plan box unchecked, and explained exactly what to tell my HR department. This changed my whole tax situation and allowed me to deduct my traditional IRA contribution despite our household income being above $200k. Seriously worth it if you need actual IRS clarification on retirement plan coverage status.

One thing nobody has mentioned - make sure you have enough earned income to support your IRA contributions! Since you're retired with only part-time work, you need at least $15,000 in W-2 wages to max out contributions for both you and your wife ($7,500 each if you're over 50). The Roth conversion income doesn't count as "earned income" for IRA contribution purposes. Only wages, self-employment income, and a few other types of income qualify.

Has anyone actually tried doing exactly what the original poster is asking about? I'm in an almost identical situation (part-time job, not eligible for their 401k, doing a large Roth conversion), and my tax software flagged my IRA deduction when I entered the Roth conversion amount.