Your traditional IRA contributions may be tax-deductible. The deduction may be limited if you or your spouse are covered by a retirement plan at work and your income exceeds certain levels. If you (and your spouse, if applicable) aren't covered by your employer's retirement plan, your traditional IRA contributions are fully tax-deductible. Counting your IRA contributions as tax deductions depends on the type of IRA you invest in, the retirement plan your employer offers, and your income.
According to the IRS, employer contributions are deductible on the employer's federal income tax return, as long as the contributions do not exceed the limits set out in section 404 of the Internal Revenue Code. While 401 (k) plan contributions are technically not tax-deductible, these retirement accounts offer significant tax benefits.