Minister Pension – IRA worksheet
Greetings! In reviewing a prior year tax return to assist with a traditional IRA setup for a pastors wife, the CPA answered NO to the question if the pastor was covered by a retirement plan.
The Pastor has a pension plan from his national church board. He doesn’t contribute directly but the church contributes 20% of his salary toward a pension. I know there are lots of special rules for pastors, but isn’t a pension considered a retirement plan?
The wife has her own business and income. I was trying to be sure their joint income allowed her to have an IRA.
Permalink Submitted by Alan - IRA critic on Tue, 2015-10-20 18:15
Sounds like the pastor is participating in a defined benefit plan. If his earnings are reported on a W-2, the retirement plan box should be checked and the deduction for his wife’s TIRA contribution would begin to be phased out at 183k MAGI. This assumes his wife is not an active participant herself regarding her business. Of course, either of them can make a non deductible TIRA contribution if they wish.