Roth IRA contribution error

Jun 03, 2006 1 Replies
N

Got married in 2005. My wife and I are each sole proprietors. We each contribute to separate SEP IRAs. We filed jointly in 2005. I did our taxes with TurboTax, which calculated that I could contribute 4,500 to a Roth IRA and my wife could contribute 4,500 to a Traditional IRA. My wife received a 5498 showing that she told the custodian to contribute the $4,500 to a ROTH IRA (she was supposed to contribute to a traditional IRA). What should I do to straighten this out? Thanks in advance...



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R

That doesn't make any sense. Since you are in identical situations (both are sole props., both are covered by a qualified plan (your SEP-IRAs)), it makes no sense that TT said one of you could contribute to a Trad IRA and the other to a Roth. The income limit for being able to contribute to a Roth is based on *joint* income and applies to *both* of you. So either both of you can contribute to a Roth or neither of you can. Am I correct in assuming you're both over age 50? Because if not, your max contribs were $4000, not $4500.

-- Rich Carreiro snipped-for-privacy@animato.arlington.ma.us

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