Eligiblity of Roth IRA, regular IRA and spousal IRA

Dec 06, 2006 2 Replies
L

Hi, I am wondering whether my wife and I are eligible for regular and Roth IRA.



I enroll my employer's 401K plan, I put $4000 into Roth IRA, I also put $4000 into my wife Roth IRA. My wife is homemaker, we file tax return as filed jointly.



My friend told me in my case, if I open IRA account, I can not deduct that from income because for a given year, $4000 is a total of ROTH and regular IRA.



Is this right?



How about my wife? We put $4000 into her ROTH, then she can not deduct anything from regular IRA?



I was told a retirement account called spousal IRA, it is for the homemakers. Is it same restriction of regular IRA, meaning we can not deduct any?



Thanks a lot!



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H

See the misc.invest.financial-plan FAQ at

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Once there, click on "General Financial Planning" and look for IRA.

-HW "Skip" Weldon Columbia, SC

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B

If you put $4000 into a Roth IRA, not only can you not deduct any IRA contribution, but you cannot *make* any other IRA contribution. As you said, $4000 is the total IRA contributions you are permitted to make - Roth and Traditional (deductible or not) combined.

If you put $4000 into her Roth, you cannot put *anything* more into her IRA. Deductions aren't even a question on the table.

The only thing which makes a particular contribution *spousal* (not the account itself!) is the fact that one may only contribute to an IRA up to the amount one has earned. A spouse who has no earnings, however, is permitted to make a contribution - that's what that's about. It has no impact whatsoever on the account contribution limits, deductibility, etc.

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