My wife did NOT (and will not) work this 2022 year. But I made Traditional IRA contributions ($1000) in Spring 2022. Do I need to "transfer" the $1000?
Or does "spousal ira" apply. Can I contribute $4000 to my "traditional" and add her $1000.
Hello,
Yes you can contribute to the spousal IRA and also to your own IRA.
Total contributions are the lesser of $6,000 or the total of your earned income
Here is a link with additional details
To begin, thank you for your initial response (on Spousal IRA).
My follow-up concerns are:
* Can we contribute (leave the already contributed $1000) to the "current, already opened, and with $1000 2022 contribution" Traditional IRA?
* Or do I need to open a brand new "Traditional IRA and designated it as the Spousal IRA"?
* Is a "Spousal IRA" a specific legal/IRS term and account? Or just an IRA for a "spouse"?
Basically, can I leave our existing $1000 in my spouse's Traditional IRA? Or do I need to move/transfer?
Hello,
You can leave everything as it is, no need to open another account or transfer money
"Spousal IRA" simply means that a person may use her spouse's earned income to qualify to make an IRA contribution. The IRA is just a regular IRA in her name. Nowhere is it designated as "spousal". You can make a $6000 contribution to her IRA and a $6000 contribution to your IRA, as long as you have at least $12,000 (6K + 6K) of earned income (wages or net self employment).
Every IRA is owned by only one person, there is no such thing as a "spousal IRA".
So you need an IRA in the name of John Smith and a separate IRA in the name of Mary Smith.
Normally, you can only contribute to an IRA if you have compensation from working (mostly W-2 income or net income from a schedule C business, but there are a few other items). The spousal IRA rules allow Mary to contribute up to $6000 to her IRA even if she does not have compensation, because she can use her spouse's compensation instead.
The maximum total IRA contribution is $6000 per person (under age 50), but you can't contribute more than your compensation from working. So for example, if your compensation from working was $10,000 and you contributed $6000 to your IRA, your spouse's maximum spousal IRA contribution would be $4000.