My wife and I are both over 70 1/2 and she has $11,450 in W2 compensation in 2020. However, our total income for the year is $53, 163 on line 9 of Form 1040. We both want to make $7,000 contributions to our IRA's but Turbo Tax claims that I can only make a contribution of $4.450 ($11.450-$7000).
IRS Publication 590-A states in part....
Kay Bailey Hutchison Spousal IRA Limit
For 2020, if you file a joint return and your taxable compensation is less than that of your spouse, the most that can be contributed for the year to your IRA is the smaller of the following two amounts.
$6,000 ($7,000 if you are age 50 or older).
The total compensation includible in the gross income of both you and your spouse for the year, reduced by the following two amounts.
Your spouse's IRA contribution for the year to a traditional IRA.
Any contributions for the year to a Roth IRA on behalf of your spouse.
This means that the total combined contributions that can be made for the year to your IRA and your spouse's IRA can be as much as $12,000 ($13,000 if only one of you is age 50 or older, or $14,000 if both of you are age 50 or older).
Anyone have experience with this subject?
Thanks,
Greg
