SIMPLE and Traditional IRA Limits

Submitted by Bill Grates on Wed, 2015-09-30 15:59

Hello,

I am currently a general partner in my business. I contribute to a SIMPLE IRA as both the employee and match as employer. I receive distributions on a K-1.

I am looking to open a traditional IRA. My spouse is not covered by a retirement plan at work.

For the purpose of determining if the traditional IRA contribution is deductible or not, does the SIMPLE plan qualify as being “covered by a plan at work?”

Thanks!



Submitted by Alan - IRA critic on Wed, 2015-09-30 17:07

Yes, SEP and SIMPLE IRA contributions make you an “active participant”. But if your spouse is not an active participant, the modified AGI limit is higher for her to get a deduction, so you might consider a spousal IRA contribution for the spouse. You must file jointly and the spouse must be the lower earner to receive a spousal IRA contribution.

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