Eligibility to make Non-Deductible Trad. IRA Contribution
Spouse 1: Earned income of $400,000, self employed physician with Ind. 401k account. Maxes out EE deferral and ER contribution for 2017.
Spouse 2: Works for spouse1 (only employee). Earned income of $22,000, maxes out Ind. 401k.
Can Spouse 2 make a Non-Deductible “SPOUSAL” Trad. IRA contribution in 2017? Or is she precluded from the spousal IRA contribution because both spouses have earned income?
Thanks for the help.
Permalink Submitted by Alan - IRA critic on Wed, 2017-01-18 16:24
Spouse 2 can make the contribution if they file jointly jointly, because taxable compensation is less than spouse 1. It does not matter if the lower earner has earned income or not, as long as it is less than other spouse. Of course, if Spouse 2 is 70.5 they cannot make a spousal contribution and their joint income is too high for a Roth contribution.