IRA contribution

[danilol]

Hello,

I file jointly with my husband.  He has retirement plan from his employer. He has 401k in 2023. He has his own traditional IRA account but we did not put any money in in 2023. I do not have retirement plan and only part time job in 2023. 

When I work on IRA section in turbutax , there is nothing can be deducted from IRA contribution if we plan to put money in my husband's IRA account for 2023.

The reason is AMGI over 137,000

But I find if I go to open a IRA account under my name and put $6500 in, all the amount is deductible.

I want to know why? Since we filed jointly, why there is difference between put money in my IRA account and his IRA account?

Thank you.

[DanaB27 · Accepted solution]

His traditional IRA deductions are limited according to these rules: IRA Deduction if You ARE Covered by a Retirement Plan at Work - 2023. Therefore, he won't get a deduction if the MAGI is more than $136,000.

Your deductions are limited according to these rules:  IRA Deduction if You Are NOT Covered by a Retirement Plan at Work - 2023 but your spouse is covered by a retirement plan. Therefore, you can deduct the full amount since your MAGI is under $218,000.

[danilol]

Thank you.

It is very clear answer. 

My understanding is although we file married jointly, but each spouse can has its own IRA account, how much IRA contribution can be deducted is based on whether the spouse covered by retirement plan offered by work and MAGI .

In my case, since I do not have retirement plan, so I can always contribute to my IRA account to reduce the total taxable income of the family( my husband and I), so as to max tax refund. Some people call it spouse strategy.

Am I correct?

[AnnetteB6]

Yes, you are correct.  As long as your MAGI is $218,000 or less (for 2023), you will be able to deduct your Traditional IRA contribution.  

The link shared above by DanaB27 will give you more information.

@danilol 

[danilol]

Thank you.