 Contributing to spouse's IRA
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 Dear
Tax Talk,
I am married with two dependents: one, my 17-year-old son, the other, my 73-year-old mother. I collect Social Security disability and my husband is still employed.
Two questions:
1. What is the income limit for being able to contribute to an IRA?
2. Since I am on disability and a dependent of my husband, can he still contribute to an IRA for me?
We have four separate IRA accounts: two traditional
IRAs (one his, one mine), two Roth IRAs (one his, one mine). So
we want to know what the guidelines are for making further contributions
to my account. Thanks for your help.
-- Donna
 Dear
Donna,
Since you're married, you're not considered a dependent of your
husband's but rather a joint filer. In the way of IRAs this means
that you can consider his wages part of yours so that you can both
contribute to your separate IRAs.
Your Social Security benefits are not considered wages
for purposes of contributing to an IRA; hence you're limited in
making contributions up to the amount of your husband's wages.
If he does not have a pension plan at work, there
are no income limits when it comes to contributing to a traditional
deductible IRA. I always recommend investing in a deductible IRA
over a Roth if possible, as the tax savings are usually worth it.
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IRA contribution limits |
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| The contribution
limit to your traditional IRA for 2006 is the smaller
of two amounts: |
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$4,000. |
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Your taxable compensation
for the year. |
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| If you
turned age 50 or older before 2007, the most that can
be contributed to your traditional IRA for 2006 is the
smaller of the following amounts: |
|
| • |
$5,000. |
| • |
Your taxable compensation
for the year. |
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For example, in order to make the maximum $10,000 in contributions for 2006 ($5,000 to each account, assuming you are both over 50), your husband's compensation has to be at least $10,000.
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