2020 Taxes Roth or IRA contribution - income requirements

[Tom in Carolina]

Both my wife and I are on Medicare and receive Social Security income

Me - beginning in 2018

Wife - She received a check for Soc Sec benefits back-dated to 11/1/19

(Spousal Benefits)

and signed up for Medicare in July

I retired from W2 income in 2018, however - 

I still receive "renewal" commissions from prior insurance sales

Q: Can I contribute to either a Roth or Traditional IRA ?

My wife retired from W2 income in July 2020

She has no other income since then

Q: Can she contribute to 

either a Roth or Traditional IRA ?

Q: If yes, is there a limit due to her only working seven months in 2020 ?

Many thanks,

Tom

[macuser_22]

The most you can contribute to all of your traditional and Roth IRAs is the smaller of:

For 2019 and 2020, $6,000, or $7,000 if you’re age 50 or older by the end of the year; or
your taxable compensation for the year.

(Taxable compensation is generally wages that you worked for - W-2 or net self-employed income minus the deducible part of the SE tax, but can include commissions, certain alimony and separate maintenance, and nontaxable combat pay ).

See IRS Pub 590A "What is compensation" for details:
https://www.irs.gov/publications/p590a#en_US_2020_publink1000230355

See this IRS article for Roth contribution limits:

https://www.irs.gov/retirement-plans/roth-iras

[dmertz]

The amount on your W-2 that will support contributions for you and your spouse is the amount in box 1 minus any amount in box 11.

[Tom in Carolina]

Hey macuser_22,

Many thanks for the speedy reply.

1) Does it matter that she only worked 7 months ?

2) Am I reading the IRS correctly that we can still make

contributions even after the year we reach 70.5 as long as we 

meet  the income requirement ?

For tax years beginning after December 31, 2019, the rule that you are not able to make contributions to your traditional IRA for the year in which you reach age 70½ and all later years has been repealed.

Again - many thanks -

Tom

[Tom in Carolina]

dmertz -

Thanks - nothing in Box 11,

so it looks like we are good to go.

Tom