Some additional details: For your wife to be able to contribute $6,500, either she must have at least $6,500 of eligible compensation or her eligible compensation must be less than yours and your combined eligible compensation must be at least $6,500. You must also file a joint tax return if any part of the contribution is being supported by your eligible compensation.
Whether or not her IRA contribution will reduce your tax bill will depend on whether or not the IRA contribution is deductible, based on her (your combined) modified AGI and whether or not either of you is covered by a retirement plan at work.
