topic Spousal IRA Deductible in Get your taxes done using TurboTax

Spousal IRA Deductible

evzig — Wed, 10 Mar 2021 21:26:26 GMT

I switched jobs in 2020 - the first part of the year (through August) I made contributions to Company A's 401k plan, however I cannot participate in Company B's 401k plan until I have a year of service in. My husband contributes to his 401k and did not switch jobs (had access/contributed all of 2020). Since I lost the access to an employee-sponsored plan, am I eligible to contribute to a traditional spousal IRA and be able to deduct that from our combined income - just over $150k.

Re: Spousal IRA Deductible

MinhT1 — Wed, 10 Mar 2021 21:43:25 GMT

You are considered as covered by a retirement plan at work even if you were not covered for the full year.

As a covered individual filing jointly, you are not eligible for a deductible IRA contribution because your MAGI is over $124,000.

Please read this IRS document for more information.

Re: Spousal IRA Deductible

evzig — Wed, 10 Mar 2021 22:20:34 GMT

So I am considered covered for the whole year even if it was at a different company and only part of the year? That's what IRS says for traditional individual IRA but there is no language for a spousal IRA where I see that clarification. Also, on a spousal IRA the AGI just needs to be below $196k to be fully deductible. @MinhT1

Re: Spousal IRA Deductible

MinhT1 — Wed, 10 Mar 2021 22:43:13 GMT

The same MAGI limits apply to Spousal IRAs which are Traditional IRAs.

Please read this IRS document for more information.