Planning IRA contributions for 2023

[BpGuy59]

I am wondering if I could contribute to a deduct a contribution to my wife's and my IRA. 

Here's my scenario for 2023. 

Roth Conversion $60K

W2 Income $45K

Net Rental Income $33K

Sched 1 deductions $32K

401K contribution for 2023 : 6K

Wife does not have W2 income. We are both over 50. 

I know I could contribute $7,500 to her IRA. I just don't know if I could deduct my own IRA contribution or If I would have to contribute to my ROTH IRA. 

The goal is to minimize income / and taxes. 

[tagteam]

@dmertz ?

[dmertz · Accepted solution]

Because you are covered by a workplace retirement plan, the MAGI limit for you to be able to deduct the full annual maximum traditional IRA contribution for 2023 is $116,000.  It appears that your MAGI would be:

$60k + $45k + $33k - $32k = $106k

so, assuming that none of what you have as Schedule 1 deductions are required to be added back to AGI in calculating MAGI, it seems that you are under the $116k limit.  If you contribute to the traditional IRA and you find that you underestimated your MAGI and some or all of your traditional IRA contribution ends up being nondeductible, you could always ask the IRA custodian to recharacterize that amount to be a Roth IRA contribution instead.