In regards to MAGGIE1234's question, the way I understand it is, the maximum deduction amount for 2014 is $5,500, but you can't deduct more than what was contributed. In the question it states that $4,000 was contributed. The $800 exclusion from the deduction is calculated as:
$4,000 (amount over the 181,000 beginning phaseout amount under the special rule for one covered, one not)
x 2 (married filing jointly, one for each spouse under special rule for one covered, one not)
/ 10
= $800.
You would then subtract that from the $4,000 contribution amount to arrive at the $3,200 deduction.
If the contribution amount would have been $5,500, then the $800 would have been subtracted from the $5,500 limit instead of the $4,000.
I think the explanation got confusing when the AGI amount over the 181,000 phase out and the contribution amount are both $4,000
B - 80
A - 82
R - 79
F - 77
Boom
"No shortcuts, work for it."
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