Roth IRA contribution

[JamesD90]

If married filing jointly, can I use both my income and my partner's income to make Roth IRA contribution just into my account? So let's say I had earned income of 1500$ this year and my partner had 1000$, can I use the combined 2500$ of earned income and contribute 2500$ into my Roth IRA alone, if no other IRA contributions were made for the year whatsoever by both of us? When i enter this 2500$  amount in TurboTax for my Roth IRA contribution for the year, it is claiming that I have an excess contribution of 1000$ that I'd need to remove before April 15 deadline or otherwise pay a 6% penalty each year? Am I missing something here?

[xmasbaby0]

You cannot put all of the income earned by the two of you into only one of your retirement accounts if the amount you are putting in that one account exceeds the amount that YOU earned.  You can only put in the amount that you earned all by yourself.  If you earned $1500 then that is all you can put into your own account.

[JamesD90]

Here's a passage from IRS publication 590-A, page 9-10 (from 2022) . Can someone explain why in the example below, they use their combined income to figure out both of their IRA contributions and make an IRA contribution  the lower earner, contribution that is higher than his earned income?

Filing Status

Generally, except as discussed earlier under Kay Bailey Hutchison SpousalFiling Status Generally, except as discussed earlier under Kay Bailey Hutchison Spo..., your filing status has no effect on the amount of allowable contributions to your tradi­tional IRA. However, if during the year either you or your spouse was covered by a retirement plan at work, your deduction may be reduced or eliminated, depending on your filing status and income. See How Much Can You Deduct, later.

Example. Tom and Darcy are married and both are 53. They both work and each has a traditional IRA. Tom earned $3,800 and Darcy earned $48,000 in 2022. Be­cause of the Kay Bailey Hutchison Spousal IRA limit rule, even though Tom earned less than $7,000, they can con­tribute up to $7,000 to his IRA for 2022 if they file a joint return. They can contribute up to $7,000 to Darcy's IRA. If they file separate returns, the amount that can be contrib­uted to Tom's IRA is limited by his earned income, $3,800.

[JamesD90]

From IRS pub 590-A-see below. Does this mean that a person can use his combined income with his spouse to determine the maximum IRA contribution for the year? Again same example: spouse 1 earns 1500$, spouse 2 earns 1000$. Combined earned income is 2500$. Based on the regulation referenced below, can spouse 1 contribute 2500$ to his own IRA, provided no other contributions were made by any of the spouses whatsoever for the same tax year?

Kay Bailey Hutchison Spousal IRA Limit

For 2022, if you file a joint return and your taxable compensation is less than that of your spouse, the most that can be contributed for the year to your IRA is the smaller of the following two amounts.

$6,000 ($7,000 if you are age 50 or older).

The total compensation includible in the gross income of both you and your spouse for the year, reduced by the following two amounts.

Your spouse's IRA contribution for the year to a traditional IRA.

Any contributions for the year to a Roth IRA on behalf of your spouse.

[dmertz · Accepted solution]

"let's say I had earned income of 1500$ this year and my partner had 1000$, can I use the combined 2500$ of earned income and contribute 2500$ into my Roth IRA"

For this specific scenario, the answer is No and TurboTax is correct to indicate an excess $1,000 IRA contribution.  To be eligible to use your spouse's compensation to support your IRA contribution you must be the one with the lower compensation (and you must file a joint tax return with your spouse).  In this example you could contribute a maximum of $1,500 to an IRA.  If your partner is your spouse, you file a joint tax return and you yourself make no IRA contribution, your spouse could contribute $2,500 to your spouse's IRA because your spouse has the lower compensation.