Eligibility to make deductible IRA contributions phases out based on what criteria?

The correct answer focuses on tax filing status and modified adjusted gross income (MAGI) as the criteria for determining eligibility to make deductible IRA contributions. The phase-out range for deductible contributions to a traditional IRA is specifically based on these two factors.

For example, if an individual or couple's MAGI exceeds certain limits, the amount they can deduct from their taxable income for their IRA contributions gradually decreases and can eventually reach zero. Different phase-out limits apply depending on whether the individual is covered by a workplace retirement plan and their filing status—single, married filing jointly, or married filing separately. This means that as income increases, the tax advantages of traditional IRA contributions can diminish, making it critical for taxpayers to be aware of these limits when planning their retirement savings strategies.

The other criteria listed do not determine phase-out thresholds for IRA contributions. Employment status and age can influence retirement savings options, but they don't directly affect the deductibility of contributions to a traditional IRA in the same structured way as filing status and MAGI do. Similarly, the number of dependents has no relevance to IRA contribution limits; it is strictly income and filing status that dictate eligibility for the tax deduction.