am i correct in saying there is no income limit if a spouse in not working and not making any money, she would be entitled to full deduction for opening an ira since the other spouse has income? i understand also if the working spouse is not participating in any retirment plans, he can open a deductable IRA regardless of his income.
-
-
They can contribute to a spousal IRA as long as the other spouse has enough earned income to cover them both.
As to your second "statement", the spouse cannot open up a deductible IRA if the other spouse is covered by (notice that this does not say "participating in") a retirement plan and you file a joint return or lived with each other at any time during the year. See Publication 590, page 6.Michael -
Huh?
Coverage by a retirement plan at work affects the phaseout of deductibility, not whether you can "open" an IRA. If you are covered and your spouse is not, your spouse's deductibility phases out between 169K and 179K AGI on a joint returnEvan Appelman, EAComment
-
The key part of that sentence was supposed to be to open a *deductible* IRA (I assumed that the original poster broke the threshold based on the phrasing of their question...maybe that was a bad assumption). You can open an IRA, but your contrbutions will not be fully deductible if you break the phase-out threshold. I have quite a few clients use non-deductible IRAs and then roll the money into a Roth IRA.
Sorry that I wasn't clear. It has been a long day...MichaelComment
-
The term "spousal IRA" is a bit of a misnomer. There's nothing about the IRA account that makes it special, so there's nothing to tell the custodian. The custodian is not responsible for ensuring you stay within the contribution limits.Originally posted by NotEasy View Post
So, for example, if the spouse goes back to work and qualifies without need for the "spousal IRA rules", the same account can be used.Comment
Comment