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cris72
New Member

If my wife and I file separately, is her IRA contribution deductible?

My wife wants to contribute to her IRA, but turbo tax tells us that our JOINT MAGI income is too high and if her employer provides a retirement plan, then her contribution is NOT deductible.  If we file separately, making her MAGI only 29K, does that make her contribution deductible?
1 Reply
VolvoGirl
Level 15

If my wife and I file separately, is her IRA contribution deductible?

On a MFS separate return her income would have to be under 10,000 to deduct an IRA.  And there are other disadvantages to filing MFS.

It is usually better to file Joint. Joint has the lowest tax rates and the highest Standard Deduction.   And if you are in a Community Property state MFS gets tricky to figure out.  Here's some things to consider about filing separately……

In the first place you each have to file a separate return, so that's two returns.  And if you are using the Online version that means using 2 accounts and paying the fees twice.  

Many people think they come out better when filing Married Filing Separate but they are probably doing it wrong.  If one person itemizes deductions then the other one must itemize too, even if it's less than the standard deduction, even if it is ZERO!  

And there are several credits you can't take when filing separately, like the
EITC Earned Income Tax Credit
Child Care Credit
Educational Deductions and Credits

And contributions to IRA and ROTH IRA are limited when you file MFS.

Also if you file Married Filing Separately up to 85`% of your Social Security becomes taxable right away even with zero other income.

See …….
https://ttlc.intuit.com/questions/1894449-married-filing-jointly-vs-married-filing-separately
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