My wife has made a year 2000 Roth contribution before we realized she's not going to have any earned income. She already maxed out her 1999 contribution.

What can we do? Can it be transferred to my Roth? What about a spousal IRA?

Thanks for your help!

Don't panic.

The rules for Roths are complicated, but assuming that your income is under 150k then both you and your wife can have a $2,000 annual Roth even if one of you is not working. The earned income of either spouse qualifies both and becomes the deciding factor. Spousal equality finally caught up to IRA rules a couple of years ago.

Here is a rather long tax practitionare article by Gary Lesser on the Roth site which has some flow chart decision diagrams you may wish to review:

ftp://rothira.com/lesser.pdf

Please note: you can not transfer assets between IRAs owned by different people. The "I" stands for individual.


[This message has been edited by John G (edited 03-20-2000).]