Situation, husband has full time job with pension plan. Wife works very little and earned about $2,000 for 2006. Both over 55 yr. filing jointly. Husband not eligible for deduction for regular IRA. But wife can contribute up to $5,000 to a regular IRA and have it deductible.
Is this correct.
Depends on their MAGI. Consult Pub 590, table 1-3. To summarize:
Full deduction allowed if MAGI < $150K Partial deduction allowed if $150K < MAGI < $160K No deduction allowed if MAGI > $160K
--Bill
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