income limits
I earn $204k+ per year and max out my 401k plan at work each year. My husband is a stay-at-home dad and has earnings of zero. Can he contribute to an IRA or a Roth IRA?
I earn $204k+ per year and max out my 401k plan at work each year. My husband is a stay-at-home dad and has earnings of zero. Can he contribute to an IRA or a Roth IRA?
Permalink Submitted by Alan - IRA critic on Wed, 2015-03-18 03:58
If 204k is your gross income before retirement plan contributions and certain deductions such as HSA contributions, your income might be reduced by these contributions to squeeze under the Roth IRA modified AGI limits in order to make contributions for both of you or even a deductible contribution for him. But would have to know your Box 1 W-2 income and deductions in order to tell. If the 204k is your W-2 box 1 amount, then your income is probably too high for anything but non deductible TIRA contributions.
Permalink Submitted by Tara Lucas on Wed, 2015-03-18 04:07
204k is before bonus. Box 1 W-2 is $232k. I will look into TIRA. Thanks for your help
Permalink Submitted by Alan - IRA critic on Wed, 2015-03-18 04:32
Modified AGI is probably too high unless you have unusual above the line deductions on your return. That would leave the IRA options as non deductible TIRA contributions only because there is no income limit for them. But any spouse who will have reached 70.5 during the year is not eligible. If either spouse has NO non Roth IRA balance, the non deductible contribution can be converted immediately to a Roth tax free, so the result would be essentially the same as a regular Roth contribution, just doing it in two steps instead of one.