Spousal IRA contribution filing MFS

[Nelstax]

I am a little confused about a spousal IRA contribution for MFS. I understand
all of the other stipulations but cannot understand that if the filing status does not
matter according to the IRS for contribution amounts why the IRS rules
and the information found in the Tax Book RTRP Exam Prep conflict. Page 46, IF
taxpayers are filing joint returns............. Page 52, Chapter 3 Quiz question #1.

IRS ruling

Filing Status

Generally, except as discussed above under Spousal IRA Limit, your filing status has no effect on the amount of allowable contributions to your traditional IRA. However, if during the year either you or your spouse was covered by a retirement plan at work, your deduction may be reduced or eliminated, depending on your filing status and income. See How Much Can You Deduct , later.

Example.

Tom and Darcy are married and both are 53. They both work and each has a traditional IRA. Tom earned $3,800 and Darcy earned $48,000 in 2011. Because of the spousal IRA limit rule, even though Tom earned less than $6,000, they can contribute up to $6,000 to his IRA for 2011 if they file a joint return. They can contribute up to $6,000 to Darcy's IRA. If they file separate returns, the amount that can be contributed to Tom's IRA is limited to $3,800.

Can someone please clarify this for me? Thank you!

[Kram BergGold]

Clarify what?

The example you laid out is spot on. This is how the law works.

[Nelstax]

Spousal IRA

Can a contribution be made to the spouse's IRA if they are filing MFS? The exam question is like the IRS site example except that they are filing separate returns and I got the answer wrong. Why state IF they are filing joint returns if it makes no difference at all? I know I am not making this clear.

If they are filing MFS can one spouse make a contribution to the other's IRA if the other does not have income or very little?

[WhiteOleander]

Can a contribution be made to the spouse's IRA if they are filing MFS? The exam question is like the IRS site example except that they are filing separate returns and I got the answer wrong. Why state IF they are filing joint returns if it makes no difference at all? I know I am not making this clear.

If they are filing MFS can one spouse make a contribution to the other's IRA if the other does not have income or very little?

If they are married but filing separately, they do not get the benefit of contributing to an IRA unless they have their own earned income. So, in your example, the MFS spouse is limited to 3800.00 because that is all the earned income he/she has. If they had filed jointly, the other spouse's earned income could be used to contribute the max. It would not have been limited to 3800.00.

[Nelstax]

Spousal IRA

Thank you, that is the information I am looking for.

The Tax Book Self-Quiz Chapter 3 answer to question #1 on the subject must be an error.
I appreciate your time and will remember this if it comes up again!

[joanmcq]

Remember, the limits on MFS deductible MFS contributions are severely limited if either spouse is covered by a retirement plan. It completely phases out at 10k of AGI. So make sure you consider ALL of the variables of the question.

If the Tax Book quiz has different AGI limits, that could account for the difference in answers.

[Nelstax]

Spousal IRA

The Tax Book has updated the answer to the quiz question mentioned to correct the error.
Thank you all for your help.