Good idea. I just retired and never had an IRA as both my wife and I maxed out our 401ks and did not qualify for a Roth or traditional (pre tax) due to income limits. This year with only one income we would qualify.
I’m in this situation. At the beginning of the year i contributed to my wife’s current Roth IRA. I just realized she has no earned income this year since she is now a stay at home mom. Does that count for a spousal contribution or do I have to open a new Roth IRA account or can we just use her current one?
I took your advice and opened a Spousal Roth IRA. My question is, how does the IRS know that this is what it is? Vanguards form only asked me if employed or not.
The IRA custodian (Vanguard) sends information every year to IRS that you have IRA. "Spousal" part is irrelevant to IRS since they know that at least one spouse works.
Will this spousal IRA work with Non-Tax deductible IRA and performing the Backdoor Roth Conversion? My wife doesn't work, I'm maxed out on 401K contribution and our income limit doesn't allow Roth contribution or IRA tax deduction. I'm thinking of opening a After-Tax / non-tax deductible IRA for my wife and doing the Roth conversion. Can this work. A second related question I have is: she currently have a Roll-over IRA. When I do the Roth conversion, does she have to convert this new IRA account and the previous Roll-over IRA account? This really impacts if I want to do this as the roll-over IRA will trigger lots of taxes during the Roth conversion.
What if both sides are working, but one makes significantly more than the other, but the combined AGI is less than the limit? Can one contribute to the other's Roth IRA?
As long as combined income is at least $12,000 both may contribute $6,000 each to their own IRA; it does not matter where the money comes from as long as there is sufficient earned income
Can the non-working spouse open the IRA or does the working spouse have to do it? If the non-working can open the account , how does the working spouse contribute to it? Is there a specific place the money needs to come from?
account can be opened with nonworking spouse name and just funding the money to the account from your regular bank account. you may deduct the amount from your joint tax filing.
Hi Jeremy - Assuming you and your spouse meet all of the qualifications to contribute, the funds can come from any non-retirement account (ie. bank account)
Late to the game here, but if my wife works full time, can I still open her up a spousal IRA considering I also work full time? Or does she have to be (non-working).
Hi Sean - Thanks for your comments and questions. If the working spouse has a 401k, it would not impact the ability to make contributions for the non-working (or retired) spouse. At least 1 person needs to have eligible compensation. Then the amount of contribution and account type (Traditional vs. Roth) would depend on how much compensation you have coming in and phase-out limits. Hope this helps! Disclaimer: Always consult IRS guidelines specific to your situation.
Sorry for the delay. As the others had mentioned, that is okay if the non-working spouse starts working. The IRS is looking at your JOINT eligible compensation (assuming you file married filing jointly). As long as your total contributions (for both the working and non-working spouse) falls within your joint eligible compensation and at or under IRA account contribution limits, then you are okay.
Good idea. I just retired and never had an IRA as both my wife and I maxed out our 401ks and did not qualify for a Roth or traditional (pre tax) due to income limits. This year with only one income we would qualify.
I’m in this situation. At the beginning of the year i contributed to my wife’s current Roth IRA. I just realized she has no earned income this year since she is now a stay at home mom. Does that count for a spousal contribution or do I have to open a new Roth IRA account or can we just use her current one?
1:36 So a couple cannot use the Married filing separately on their 1040?
Can you do a “back door spousal Roth IRA” if your spouse has no earned income and you make over the contribution limit for Roth IRA?
I believe the answer is yes
I’ll have to look into it again. I have my own, but I never figured out if I could do one for her.
I took your advice and opened a Spousal Roth IRA. My question is, how does the IRS know that this is what it is? Vanguards form only asked me if employed or not.
The IRA custodian (Vanguard) sends information every year to IRS that you have IRA. "Spousal" part is irrelevant to IRS since they know that at least one spouse works.
Will this spousal IRA work with Non-Tax deductible IRA and performing the Backdoor Roth Conversion? My wife doesn't work, I'm maxed out on 401K contribution and our income limit doesn't allow Roth contribution or IRA tax deduction. I'm thinking of opening a After-Tax / non-tax deductible IRA for my wife and doing the Roth conversion. Can this work. A second related question I have is: she currently have a Roll-over IRA. When I do the Roth conversion, does she have to convert this new IRA account and the previous Roll-over IRA account? This really impacts if I want to do this as the roll-over IRA will trigger lots of taxes during the Roth conversion.
Nicely done
What if both sides are working, but one makes significantly more than the other, but the combined AGI is less than the limit? Can one contribute to the other's Roth IRA?
As long as combined income is at least $12,000 both may contribute $6,000 each to their own IRA; it does not matter where the money comes from as long as there is sufficient earned income
Can the non-working spouse open the IRA or does the working spouse have to do it? If the non-working can open the account , how does the working spouse contribute to it? Is there a specific place the money needs to come from?
account can be opened with nonworking spouse name and just funding the money to the account from your regular bank account. you may deduct the amount from your joint tax filing.
Can the funding come from the non-working spouse's bank account?
Hi Jeremy - Assuming you and your spouse meet all of the qualifications to contribute, the funds can come from any non-retirement account (ie. bank account)
Can contribution to IRA be made in non-working spouses name if working spouse does not contribute to an IRA?
yes
Can I contribute to non-working spouse IRA if they are receiving social security retirement?
Late to the game here, but if my wife works full time, can I still open her up a spousal IRA considering I also work full time? Or does she have to be (non-working).
Great stuff.
Question, what happened if the working spouse has a 401k?
Hi Sean - Thanks for your comments and questions. If the working spouse has a 401k, it would not impact the ability to make contributions for the non-working (or retired) spouse. At least 1 person needs to have eligible compensation. Then the amount of contribution and account type (Traditional vs. Roth) would depend on how much compensation you have coming in and phase-out limits. Hope this helps! Disclaimer: Always consult IRS guidelines specific to your situation.
Hi, what if the nonworking spouse later starts working?
It won’t matter because you would be qualified to contribute either way. But within the amount limits.
Sorry for the delay. As the others had mentioned, that is okay if the non-working spouse starts working. The IRS is looking at your JOINT eligible compensation (assuming you file married filing jointly). As long as your total contributions (for both the working and non-working spouse) falls within your joint eligible compensation and at or under IRA account contribution limits, then you are okay.
I'm 34 and my wife is 42 and not working right now. Would a Spousal IRA be good for us?