TomD8
Level 15

Retirement tax questions

Tom cannot contribute to his Traditional IRA by himself, because pension income is not considered earned income.

But if Tom & Alice file a joint return, only one of them has to have earned income in order to contribute to the IRA's of both.   The most that can be contributed for the year to each person's IRA is the smaller of the following two amounts:

  1. $5,500 ($6,500 if you are age 50 or older), or

  2. The total compensation includible in the gross income of both you and your spouse for the year, reduced by the following two amounts.

    1. Your spouse's IRA contribution for the year to a traditional IRA.

    2. 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 $11,000 ($12,000 if only one of you is age 50 or older or $13,000 if both of you are age 50 or older).

Since the working spouse (Alice) is covered by a retirement plan at work, deductibility of their IRA contributions on a joint return phases out for them as described in dmertz's comment below.

https://www.irs.gov/publications/p590a/ch01.html#en_US_2015_publink1000230412

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

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