Traditional IRA deduction confusion

[doneby35]

I've looked into this a couple of years ago but it seems that I don't yet fully understand it.
I've been contributing to a traditional IRA for myself and my wife (she is stay-at-home). My salary used to be 120k, and with 19k contributed to 401k and 7k contributed to HSA, leaving me with a MAGI of less than 104k allowing for a full IRA deduction for me and my wife.

I recently got a new job offer with a salary of 160k. If I contribute 19k to 401k and 7k to HSA, I will be above the 104k MAGI allowing a full deduction.
Am i misunderstanding this? Is 104k the limit for a full deduction for both myself and my stay at home wife? or is it the other limit of 196k as shown on the IRS website?
https://www.irs.gov/retirement-plans/plan-participant-employee/2020-ira-contribution-and-deduction-limits-effect-of-modified-agi-on-deductible-contributions-if-you-are-not-covered-by-a-retirement-plan-at-work

[seattlecyclone]

That $196k limit would apply to your wife, as she is not covered by a retirement plan at work but her spouse is. The lower limit would apply to you as you are personally covered by a retirement plan.

[doneby35]

Thanks. So then I can contribute the max amount to her account and it would be fully deducted. And for myself I just contribute to a Roth IRA now instead of the traditional IRA?

[terran]

Thanks. So then I can contribute the max amount to her account and it would be fully deducted. And for myself I just contribute to a Roth IRA now instead of the traditional IRA?

Right. If your MAGI is between $104-124k you could also deduct a partial contribution, so if you want to completely optimize your IRA contribution you could do those calculations and split your contribution between traditional and Roth. See https://www.irs.gov/retirement-plans/plan-participant-employee/2020-ira-contribution-and-deduction-limits-effect-of-modified-agi-on-deductible-contributions-if-you-are-covered-by-a-retirement-plan-at-work