topic Both have federal pension,wife works part time with box1 wages of 11500.00 like to fund our Roths. how much can we contribute, husbands will be a spousal contribution. in Retirement tax questions

Both have federal pension,wife works part time with box1 wages of 11500.00 like to fund our Roths. how much can we contribute, husbands will be a spousal contribution.

bmeuse4life — Mon, 03 Jun 2019 18:55:37 GMT

It depends on your age and taxable income. Here is what...

DanielV01 — Mon, 03 Jun 2019 18:55:38 GMT

It depends on your age and taxable income. Here is what is stated on the IRS website IRA and Roth Contribution Limits:

For 2015, 2016, 2017 and 2018, your total contributions to all of your traditional and Roth IRAs cannot be more than:

$5,500 ($6,500 if you’re age 50 or older), or
your taxable compensation for the year, if your compensation was less than this dollar limit.

In your case, if at least one of you is over 50, you are able to make a total of $11,500 of Roth contributions, because you have $11,500 of taxable compensation. Even though only one spouse has income, there is a provision that allows each of you to contribute up to the max amount that income will allow. (In your case, this is up to the $11,500 of taxable income you are reporting). Do not reduce the contribution by the amount of Social Security and Medicare withheld from your wages.

[Edited 03/17/2019:12:53 PST]

Pension income is State Tax Free, Thought Roth contributi...

bmeuse4life — Mon, 03 Jun 2019 18:55:40 GMT

Pension income is State Tax Free, Thought Roth contributions had to be EARNED income to be eligible for an IRA contribution..? we only have W2 Box1 wages of 11500.. can we do all of that amount or do we need to deduct any SS or medicare ?

@bmeuse4life I did a bit more research and noticed I had...

DanielV01 — Mon, 03 Jun 2019 18:55:41 GMT

@bmeuse4life I did a bit more research and noticed I had confused the word compensation with income. You are correct: pension income does not count for this calculation. However, you do not subtract SS and Medicare taxes paid from your taxable income. See my revised answer.