SIMPLE IRA and Roth together
There is an earnings income limit for a Deductible IRA if either spouse is an active participant in workplace retirement plan, married filing jointly–$99,000-$119,000. In this case the couple filing jointly have income exceeding $119,000.
If the employee participates in the company SIMPLE IRA, based on this circumstance can either spouse still contribute to a non-deductible IRA or a Roth IRA?
Would the solution be to pair SIMPLE IRA with a ROTH IRA?
Permalink Submitted by Alan - IRA critic on Thu, 2017-02-02 01:52
The MAGI is much higher for the non covered spouse. It is the same as the Roth MAGI limit, so the non covered spouse may qualify for the TIRA deduction or have the option of making a Roth contribution. The covered spouse (SIMPLE IRA participant) has the lower MAGI you cited to deduct a TIRA contribution. If joint MAGI allows a Roth contribution for that spouse, this is always preferable to a non deductible TIRA contribution.
Permalink Submitted by Anthony Zalesky on Thu, 2017-02-02 17:19
Thanks Alan and here’s a follow up question. if the client maxes out his SIMPLE IRA and also contributes to a Roth IRA–RIRA, are there any contribution limits i need to consider or about which i need to be concerned?TY
Permalink Submitted by Alan - IRA critic on Thu, 2017-02-02 17:29
No, the usual separate limits for each type of contribution apply. They do not affect each other except that the higher his SIMPLE deferrals, the lower his MAGI becomes. That could help if his MAGI is over the Roth contribution limit.