I am too old to contribute to and IRA. My wife in 62. She made roughly $6000 as a contract employee this year.
We would like to contribute as much as possible to her IRA. Last year I tried to contribute more than she made and Turbotax said I couldn’t do that. Turbotax said that we could only contribute her gross earnings minus what she owed in Social Security (self employment taxes). We had already made the contribution so we had to go to the custodian and recharacterize part of the contribution to be for 2016. This year, we haven’t yet contributed the money, but I put down $6500 (more than she made). I expected Turbotax to again tell me I could not do that. But this year Turbotax is happy to accept $6500. I suppose the IRS may have changed the rules, but I’d like to know so that we can make the appropriate contribution and not have to go back later and amend and ask the custodian to again recharacterize. Can you assure me that Turbotax is correct in allowing me (us) to contribute more than my wife’s net salary to her IRA?
For 2015, 2016, and 2017, your total contributions to all of your traditional and Roth IRAs cannot be more than:
In your wife's case, she will also need to subtract the 2016 contribution she has already made when she recharacterized part of the 2015 contribution.
For 2015, 2016, and 2017, your total contributions to all of your traditional and Roth IRAs cannot be more than:
In your wife's case, she will also need to subtract the 2016 contribution she has already made when she recharacterized part of the 2015 contribution.