Possible to make TIRA contributions after 70.5 while implimenting QCD?
While I am retired and over 70.5, my bride is self-employed and was able to make 2015 RIRA contributions.
Since she has sufficient 2016 earned income, would it be legal and more tax efficient to
1. Make deductible TIRA contributions instead, including TIRA contributions for myself as well?
2. Then, could I make QCD from my TIRA?
Thank you, Alan!
Permalink Submitted by David Mertz on Fri, 2016-06-10 12:52
Since you are over age 70½, you are not permitted to make a traditional IRA contribution.
Permalink Submitted by Alan - IRA critic on Fri, 2016-06-10 16:30
If you are filing jointly, you could make a Roth contribution using her income, but no TIRA contribution due to age. Spousal Roth contributions do not affect your RMD, but if you want to make a QCD to offset the taxable income from your RMD, be sure to do the QCD as your first distribution of the year. If you took your full RMD out before doing a QCD, your RMD would be taxable.
Permalink Submitted by Ron Smith on Fri, 2016-06-10 18:06
Thank you, Alan! Had a hunch I was missing something.Could she use TIRA contributions this year to offset taxable income and then start making QCD once she turns 70.5?
Permalink Submitted by Alan - IRA critic on Fri, 2016-06-10 18:18
She can only make a TIRA contribution in years prior to the year she will reach 70.5. Whether those contributions can be deducted or not depends on modified AGI for her tax filing status, and whether she is participating in a job based retirement plan such as a SEP IRA, 401k, etc.