Deductibility
The question is can the wife fund a deductible IRA contribution??
Scenario:
Husband makes $140K and has a company sponsored Simple IRA plan that he participates in. Wife makes $155K and has no qualified company sponsored plan but contributes to non-qualified company sponsored deferred compensation plan.
Can she contribute to a deductible ira??
Secondly, can they both fund a non deductible ira if she can not do a deductible ira??
In addition to an answer, I need some supporting documentation for the file…
Thanks so much!!
Permalink Submitted by Denise Appleby on Fri, 2007-11-02 15:54
See tutotial at http://www.retirementdictionary.com/tutorials2.htm
Documents for file is Pub 590 at http://www.irs.gov
Permalink Submitted by Alan Spross on Fri, 2007-11-02 18:44
Anyone with enough taxable compensation can make a non deductible TIRA contribution. The status of other plan participation may eliminate the deduction, but not the option of making a non deductible contribution which would be documented on Form 8606.
Making these contributions has become viable once again for higher income taxpayers that were unable to get funds into a Roth IRA. Making non deductible TIRA contributions now will provide funds to convert after 2009 when the conversion income limits disappear. However, even after 2009 the Roth income limits remain for regular Roth contributions, so conversions or the Roth 401k or 403b options will be the only way to accumulate Roth assets.