Traditional IRA Eligibility
I thought that anyone who is not eligible for a retirement plan at work could do a traditional contribution ($5,500 under 50/$6,500 50 & over).
Reading your latest issue, it looks like if the spouse is eligible, then there is the same phase out as a Roth.
I just wanted to double check, since it was contrary to what I had heard before.
Thanks
Jan
Permalink Submitted by Alan - IRA critic on Mon, 2015-01-26 23:19
The issue is correct. If the non covered spouse is married to a spouse that IS covered by a workplace plan, the deduction for the non covered spouse is phased out between 181k and 191K (for 2014) modified AGI. That is the same modified AGI where Roth contributions are phased out. If the non covered spouse does not have any other non Roth IRA accounts, they could make a non deductible TIRA contribution and then convert it to Roth tax free. That would at least get them a Roth contribution, but no way to get a deduction for a TIRA contribution. Make sure the modified AGI amount for a particular taxpayer is correct because all these phaseouts have different definitions of modified AGI.