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Level 1

Contribute to traditional IRA while taking RMD for an inherited IRA

My wife inherited an IRA and she will be taking RMDs from this year.  (We are in our 50s and we file jointly).  We contribute each year to her traditional IRA and claim deduction for this amount.  Now, as long as we include the RMD in our taxable income and pay taxes on that amount, can we still contribute to her traditional IRA and claim deduction for this contribution? 

 

Thanks!

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Level 15

Contribute to traditional IRA while taking RMD for an inherited IRA

Yes. An inherited IRA has nothing to do with IRA contributions.

 

The maximum IRA contributions for 2019 is $6,000, or $7,000 if you’re age 50 or older by the end of the year; or your taxable compensation for the year which ever is less.

(Taxable compensation is generally wages that you worked for - W-2 or net self-employed income minus the deducible part of the SE tax, but can include commissions, certain alimony and separate maintenance, and nontaxable combat pay ).

See IRS Pub 590A "What is compensation" for details:
https://www.irs.gov/publications/p590a#en_US_2018_publink1000230355

See this IRS link for Traditional IRA deduction limits when covered by a retirement plan at work.

https://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**