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pkretz
Returning Member

How to successfully enter Spousal IRA contribution

How can I successfully enter a Spousal IRA contribution?    

 

We are filing as MFJ, spouse and I are both retired and neither of us are covered by retirement plans.  Spouse has a W2 from former employer last year for contract work for $4999, and my income is $0. 

 

Her IRA contribution for this amount works fine.  I am also making a Spousal IRA contribution for that same amount, but TT calculates this an as overpayment since I had no income, and adds penalties. 

 

How do I get TT to recognize my IRA Spousal contribution for the amount of her W2 income?  

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4 Replies
MayaD
Expert Alumni

How to successfully enter Spousal IRA contribution

Per IRS: The total of your combined contributions can’t be more than the taxable compensation reported on your joint return. 

IRA Contribution Limits.

In TurboTax when entering the information, make sure you are indicating that both you and your spouse are contributing to an IRA so it is not doubling the contributions to either one of you. 

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pkretz
Returning Member

How to successfully enter Spousal IRA contribution

Thanks.  Yes, I do that - create entry for my contribution and for spouse contribution - these are separate entries. 

 

In the IRA Contribution interview, however, there is no place that I can find to indicate my status as a spousal contribution, and so far I can't get TT to recognize that.  My income was zero, spouse has the W2 for $4999 (value is less than contribution limit).  When I enter an IRA contribution value of $4999 for me, TT calculates a penalty for excessive contribution. 

 

So, I still have the same question - how can I get TT to recognize that I am making a spousal IRA contribution?   I anticipate there is a different way to enter the information, that I don't yet see? 

pkretz
Returning Member

How to successfully enter Spousal IRA contribution

Different view - Total taxable compensation for my wife was $4999.  I'm not thinking that our combined IRA contribution can only go up to that amount - i.e. she could make an IRA contribution, and I could make an IRA contribution, but the sum of those contributions can't exceed her taxable compensation.  So in this case we are limited to $4999 combined contribution for 2023.  

 

Does this sound right?  If so, that explains why TT is finding two contributions of $4999 to be excessive.  

 

Thanks.

dmertz
Level 15

How to successfully enter Spousal IRA contribution

Correct. The sum of your spouse's IRA contribution and your IRA contribution is not permitted to exceed $4,999.

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