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Level 1

Can I contribute to my IRA if my wife had a 401K with her employer?

 
2 Replies
Level 1

Can I contribute to my IRA if my wife had a 401K with her employer?

Yes. You can contribute to a Traditional IRA. However, because your wife has a 401(k), this can reduce your Traditional IRA deduction or eliminate it altogether. 

Whether or not you can take a deduction for your Traditional IRA contributions, depends on whether or not you or your spouse are covered by an employer sponsored retirement plan. If one or both of you are covered by an employer sponsored retirement plan, then your deduction might be reduced or eliminated based on your modified adjusted gross income and your filing status.

  To determine your modified adjusted gross income, please see Worksheet 1-1 on page 15 of Pub 590A.  https://www.irs.gov/pub/irs-pdf/p590a.pdf 

Please refer to Table 1-2 and Table 1-3  on page 13 of Pub 590A to see if your deduction will be limited. If you are collecting social security, do not refer to these tables. Instead, see page 12 of Pub 590A under "social security recipients" for more information. 

If your deduction will be limited, then you can use Worksheet 1-2 "figuring your reduced IRA deduction" on page 17 of Pub 590A, to determine the amount of your deduction.

Level 3

Can I contribute to my IRA if my wife had a 401K with her employer?

Is the modified AGI limit being referred to below (on IRA tax-deductible contributions legibility) referring to combined modified AGI (including spouse who is enrolled in a 401k plan) OR the individual's modified AGI? Assume that the couple is filing a joint return.

"If you are married and your spouse is covered by a retirement plan at work and you aren’t, and you live with your spouse or file a joint return, your deduction is phased out if your modified AGI is more than $193,000
(up from $189,000 for 2018) but less than $203,000 (up from $199,000 for 2018). If your modified AGI is $203,000 or more, you can’t take a deduction for contributions to a traditional IRA."