Federal filing joint return. I am 68 and my wife is 68.
Retired in July of 2017.
My wife did work the last 10 years.
We are both taking Social Security benefits.
I have pension from the state of Iowa, which I took benefits from for 6 months.
Want to add $5000 to an IRA to save on taxes.
If put the money if my wife's name it saves more on my return, but she didn't have any earned income from 2017. I have 6 months of earned income for the year.
Also will it be a problem if I take some money out of the IRA, and then put some back in?
How should I handle this $5,000 addition to an IRA.
Thanks, Bob
As long as you have earned an income it is possible to have a spousal IRA.
You still have to meet the other conditions.
A nonworking spouse can make a deductible IRA contribution of up to $5,500 for2017 ($6,500 if age 50 or older as of Dec. 31, 2017) as long as the couple files a joint return, and the working spouse has earned income that equals are exceeds the sum of the nonworking spouse's contribution plus the working spouse's.
I do not advise taking some money out of IRA and then putting some in, as it may cause some other issues.
Why would you want to take money out and then put money in? What do you want to accomplish?
Since my income will be lower in 2018, I may need to withdraw some money from IRA in 2018,
If you take money out in 2018 the it will be a taxable distribution in 2018.
As long as you have earned an income it is possible to have a spousal IRA.
You still have to meet the other conditions.
A nonworking spouse can make a deductible IRA contribution of up to $5,500 for2017 ($6,500 if age 50 or older as of Dec. 31, 2017) as long as the couple files a joint return, and the working spouse has earned income that equals are exceeds the sum of the nonworking spouse's contribution plus the working spouse's.
I do not advise taking some money out of IRA and then putting some in, as it may cause some other issues.