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My husband is retired and does not have earned income. I do have earned income and contribute the max amount to a traditional IRA ($7000). Why is TurboTax saying my husband can make a contribution to a traditional IRA ($3701) and save money in taxes? I thought he had to have earned income.
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Per IRS: To contribute to a traditional IRA, you, and/or your spouse if you file a joint return, must have taxable compensation, such as wages, salaries, commissions, tips, bonuses, or net income from self-employment.
since your spouse has less income than you do, your earned income less the $7,000 you used for yourself, can be used to fund his IRA also.
This is called a spousal IRA contribution.
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