You'll get plenty of other tax benefits, though, if you save for retirement in a Roth IRA. By Kimberly Lankford, Contributing Editor August 21, 2008 If I contribute $5,000 to my Roth IRA this year, am I able to write it off on my income-tax return?Nope. Roth IRAs are never tax deductible. But you can get some even bigger benefits: You can withdraw the money tax-free after age 59½, as long as you've had a Roth for at least five years. Plus, you can withdraw your contributions penalty- and tax-free at any time, you won't have to take required minimum distributions from a Roth IRA in retirement, and your heirs can inherit the money income-tax free. You can contribute the full $5,000 to a Roth IRA (or $6,000 if 50 or older)only if your adjusted gross income in 2008 is less than $159,000 if married filing jointly or $101,000 if single. Married filers can make a partial contribution if their joint income is less than $169,000 ($116,000 if single). See Calculate Your Eligibility for a Roth IRA for details. If you earn more than that, you can contribute to a traditional IRA instead of a Roth. You'll have to pay taxes when you withdraw the money, but the money grows tax-deferred until then. Advertisement If you're single and not covered by a retirement plan at work, then you can fully deduct your contributions to a traditional IRA. If you are covered by a plan, your right to deduct contributions is gradually phased out as your adjusted gross income rises from $53,000 to $63,000. For married couples, IRA deductibility also turns on whether the husband or wife is covered by a company retirement plan. If neither is covered, contributions to traditional IRAs are deductible. Period. If both husband and wife have plans at work, the IRA deduction phases out as AGI on a joint return rises from $85,000 to $105,000. But what if one spouse is covered and the other is not? The covered spouse falls in the $85,000 to $105,000 phase-out zone while the uncovered spouse gets a deduction even if AGI is higher. For him or her, the deduction is phased out as income rises between $159,000 and $169,000. These figures are for 2008 contributions; the phase-out zones may rise in future years. If you are covered by a retirement plan at work, then you can still make tax-deductible IRA contributions if your adjusted gross income is below $63,000 in 2008 if single; $105,000 if married filing jointly. If you're married and your spouse is covered by a retirement plan at work but you are not, you can deduct your traditional IRA contribution if your joint income is less than $169,000 in 2008. See IRS Publication 590, Individual Retirement Arrangements for details about how much you can deduct if your income is near the cut-off. Advertisement If you participate in a retirement plan at work and your income is above the cut-off for deducting contributions, you can still contribute to a traditional IRA and benefit from the tax-deferred growth. Plus, it can give you a sneaky way to get into a Roth. Here's how: Currently, your adjusted gross income must be less than $100,000 (whether married or single) to roll over a traditional IRA into a Roth. But that income limit for rollovers disappears in 2010. You can start contributing $5,000 per year to a traditional IRA now, then roll it all over into a Roth when the law changes in 2010. To switch to a Roth, you'd have to pay income taxes on the total IRA balance if you've made only tax-deductible contributions. But if you've made only nondeductible contributions to the IRA, then you'll be taxed only on the earnings. After you pay the tax bill, the money grows tax-free in the Roth. If you're only rolling over part of your traditional IRA balance to a Roth, the tax rules get tricky. See The Taxing Side of IRA Conversions for details. Start setting aside some money outside of the IRA now to pay the tax bill -- so you won't have to tap your account to make the switch. If you convert a traditional IRA to a Roth in 2010, you can spread your tax bill over 2011 and 2012. See When to Switch to a Roth IRA for more information. For more about the benefits of a Roth IRA, see Why You Need a Roth IRA. Got a question? Ask Kim at firstname.lastname@example.org.