Direct Roth IRA Contribution
Can a client with a NON Working Spouse under the following conditions make a Direct Roth Contribution ?
Husband earns over the roth limit (income 800k) he also has a 401k at work
Spouse does NOT work and they file joint return
Question – can this spouse make a direct Roth Contribution or does she need a nondeductible IRA and convert to Roth ?
Permalink Submitted by Alan - IRA critic on Tue, 2017-01-17 16:04
When MAGI is over the income limit for the filing status used, neither spouse can make a regular Roth contribution. Therefore, the only option for both spouses here is a non deductible TIRA contribution. When converting these contributions, the pro rate rules of Form 8606 apply, meaning that any other non Roth IRAs for the respective spouse are included in determining the taxable portion of a conversion. For example, if the non working spouse does not have any other non Roth IRA balance beside the current contribution, her conversion would be tax free.