For a traditional IRA, you're allowed to contribute up to a maximum of $5,000 . The maximum is $6,000 if you're age 50 or older.

However, if you're an active participant in a company plan, your traditional IRA deduction:

• Begins to phase out when your modified adjusted gross income (AGI) reaches $58,000 -- $92,000 if married filing jointly
• Is phased out completely when your modified AGI is more than $68,000 -- $112,000 if married filing jointly. So, you can't deduct your traditional IRA contribution.

Although you might not be able to deduct your traditional IRA contribution, you can make nondeductible IRA contributions. If you make nondeductible contributions to a traditional IRA, complete Form 8606 and file it with your return. This form helps you keep track of your basis in the account. Basis includes the total amount of nondeductible contributions that you make. This is important since it will keep you from paying tax on the money a second time when you withdraw it.