i401(k) Contribution and impact on spouse
I have a client who is married filing joint and for 2015 they have an AGI in excess of $200k. Both clients are are over 50 yo. His business is a sole prop and we set up an i401(k) two years ago and for 2015 he has contributed the max. of $59k. His wife does not have a work-sponsored retirement plan so we contributed the maximum to her traditional 401k of $6,500 for 2015. Due to income limitations, will her contribution be considered tax deductible for 2015? Thanks for your assistance!
Permalink Submitted by Alan - IRA critic on Wed, 2016-04-06 18:34
Since their modified AGI is over 194,000 and the husband participates in a workplace plan, she cannot deduct her traditional IRA contribution. She is also ineligible for a regular Roth contribution, and that leaves a non deductible TIRA contribution as her only option. Better determine the exact modified AGI figure here, since 200k is only slightly over the top of the deduction threshold.
Permalink Submitted by David Deckert on Wed, 2016-04-06 20:45
Alan…thanks so much for your quick response and assistance!