Self Employed contribution to an IRA
I am self employed and have a traditional IRA. I am confused about something I read thatsays I cannot contribute to my IRA if my husband contributes to a 401K at his employer.
Please respond,
Thank you
I am self employed and have a traditional IRA. I am confused about something I read thatsays I cannot contribute to my IRA if my husband contributes to a 401K at his employer.
Please respond,
Thank you
Permalink Submitted by Alan Spross on Fri, 2009-05-29 21:14
If you have earned income, or even a spouse’s earned income, you can contribute to a traditional IRA. What you heard probably relates to your ability to deduct that traditional IRA contribution. Because he is covered by a retirement plan at work, your joint modified AGI begins to eliminate your deduction at $166,000. That is also the figure at which your ability to make a Roth IRA contribution begins to be phased out. But if you want to make a non deductible contribution, you can do so and file Form 8606 reporting your new and/or updated basis in your traditional IRA.
Starting in 2010, there are no income limits to convert to a Roth IRA. To the extent you have basis from non deductible contributions in your traditional IRA, your conversion would be tax free.