IRA tax deduction doesn't exist; However, there is something even more valuable. It's known as the saver's tax credit, and you're eligible if you make a retirement savings contribution to your employer's plan or an IRA-type vehicle (Roth or traditional). Your adjusted gross income for the year determines if you qualify.
It doesn't matter whether you contribute to a Roth IRA, traditional IRA, or SEP IRA, or if you contribute to your employer's 401(k), 403(b), 457, 401(a), or other qualified plan. You're still eligible for the tax credit if you're under the agi limits.
Your agi or adjusted gross income is your gross income minus "adjustments to income" on schedule 1040 or schedule 1040a. Adjustments to income are commonly referred to as "above the line" deductions since these deductions are available to all taxpayers, regardless of whether you itemize or take the standard deduction.
Following are the more popular adjustments to income. If you want the entire list, visit http://www.irs.gov/uac/Definition-of-Adjusted-Gross-Income.
If you're making traditional contributions to your employer's plan, those contributions have the same effect as an adjustment to income, even though they're not deducted here. Traditional retirement contributions are subtracted from your wages for the year and reflected on your W-2 statement.
A traditional contribution to your employer's plan and a traditional IRA contribution have the same effect on your agi: Each lowers it by the amount of your contribution.
Only contributions to a traditional IRA-type vehicle or traditional contributions to a qualified employer plan qualify for a tax deduction. There is no Roth IRA tax deduction. Tax free earnings is the tax advantage you receive when investing in a Roth vehicle.
Don't discount the value of tax free earnings, especially if you've got a long time to go before reaching age 59 1/2 (the year you can start taking tax free withdrawals). Even though there's no Roth IRA tax deduction, you can really rack up the tax free earnings if you've got a long time horizon for investment.
Even though there is no Roth IRA tax deduction, you still might qualify for the saver's tax credit. If you do, it's tough to beat tax free earnings and a tax credit, just for making a Roth IRA contribution!