Spousal IRAs For Non-Earning Spouses

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In the past few years, the rules have changed for spousal IRAs; the amount that is eligible for deduction has changed and the rules governing the eligibility of the “spouse” have changed. As a spouse, you can contribute to either a Roth IRA or traditional IRA.

  • In 2013, a full-time homemaker is eligible for an IRA contribution of up to $5,500 annually. If you are age 50 or older you may contribute a $1,000 as a catch-up contribution or $6,500.
  • If your spouse was not covered at any time during the year by an employer retirement plan, you are eligible to deduct a full IRA contribution of $5,500 (or $6,500 if you are 50 or older); there is no income limit.
  • If your spouse was covered by an employer retirement plan at any time during the year for which contributions were made, your deduction may be reduced if you are contributing to a traditional IRA.

    • If your spouse is covered by an employer retirement plan, as long as the couple’s total income is less than $178,000, the at-home spouse can take a full $5,500 deduction (or $6,500 if you are 50 or older).
    • There is a phased-in deduction if the couple’s total income is more than $178,000 and less than $188,000.
    • If your spouse is covered by an employer retirement plan, and your total income is more than $188,000, you cannot make deductible contributions to an IRA.
Note: If you were divorced or legally separated (and did not remarry) before the end of the year, you cannot deduct any contributions to your spouse's IRA. After a divorce or legal separation, you can deduct only the contributions to your own IRA. Your deductions are subject to the rules for single individuals.For more information, visit: www.smartmoney.com/retirement/planning/spousal-iras-7956/Source: IRS, http://www.irs.gov/publications/p590/ch01.html#en_US_publink1000230444

 

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