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As a sole proprietor with a solo 401k can I still contribute to a spousal IRA for my wife?

 
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Employee Tax Expert

As a sole proprietor with a solo 401k can I still contribute to a spousal IRA for my wife?

Maybe. 

A spousal IRA is really just a traditional IRA (TIRA) made for a non-working spouse. A non-working spouse can make a deductible ira contribution as long as the working spouse has earned income that equals the sum of the non-working spouse's contribution plus the working spouse's contribution (even if working spouse does not contribute to one). You must also file jointly.

However, because you participate in a retirement plan at work (as an employee/employer), her TIRA deduction can be limited or phased out completely depending on your joint modified adjusted gross income.

Deduction income limits if spouse is covered by a plan at work:

https://www.irs.gov/retirement-plans/2017-ira-deduction-limits-effect-of-modified-agi-on-deduction-i...

Spousal IRA rules and examples:

https://www.irs.gov/publications/p590a

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1 Reply
Employee Tax Expert

As a sole proprietor with a solo 401k can I still contribute to a spousal IRA for my wife?

Maybe. 

A spousal IRA is really just a traditional IRA (TIRA) made for a non-working spouse. A non-working spouse can make a deductible ira contribution as long as the working spouse has earned income that equals the sum of the non-working spouse's contribution plus the working spouse's contribution (even if working spouse does not contribute to one). You must also file jointly.

However, because you participate in a retirement plan at work (as an employee/employer), her TIRA deduction can be limited or phased out completely depending on your joint modified adjusted gross income.

Deduction income limits if spouse is covered by a plan at work:

https://www.irs.gov/retirement-plans/2017-ira-deduction-limits-effect-of-modified-agi-on-deduction-i...

Spousal IRA rules and examples:

https://www.irs.gov/publications/p590a

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"