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Spouse not working and IRA Contribution


Guest jeepnsam
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Guest jeepnsam

Hello all,

So my wife decided to stay on with the new born and out three year old this year

and hasn' worked since Sept 2013 and I have some questions regarding

contribugtions to her IRA Account.

1) Since I am the sole earner now, can we still still contribute to BOTH of IRA's for the 2015 calendar year?

I make IRA contributions at the begining of the year.

2) I've heard that she has to earn income more or matching the amount that we contribute to her IRA.

Is that accurate?

So if she earns $5,500 in 2014, we can contribute $5,000 in 2015?

3) Does stock dividend interest payments from a non IRA account qualify as "earned income"?

4) Does the sell of publicly traded common stock qualify as "earned income"?

IE: purchase shares low and sell high

Thanks for the answers.

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The rules on spousal IRAs changed a bit in recent years so take what you've previously heard w/ a grain of salt, as it might be dated. See IRS Publication 590, especially but not limited to page 11. http://www.irs.gov/pub/irs-pdf/p590.pdf

Page 8 of that publication explains what is and isn't compensation for this purpose. Neither of the items you list qualify.

Kurt Vonnegut: 'To be is to do'-Socrates 'To do is to be'-Jean-Paul Sartre 'Do be do be do'-Frank Sinatra

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I agree with the previous poster - investment income (regardless of the amount of skill that may have been involved in obtaining investment income) is considered "unearned income". So that would not apply to determine how much can be contributed to an IRA.

But the IRS publication makes it pretty clear to me (for what that is worth) that if your earned income is more than $11,000, both you and your spouse can make contributions to IRAs (assuming that neither of you are otherwise retirement plan participants or 70 1/2).

Always check with your actuary first!

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Guest jeepnsam

Guys and Gals,

Thanks for the feedback.

1) I do contribute to a matching 401k that I max out each year.

2) I do contribute to my own and wife's IRA (but I know that it's not a tax write off because I contribute to a 401k)

With all the laws changing here and there...I'll deposit now and ask questions and pay gov penelties later LOL!!

What's the worst than can happen, tax my IRA earnings for the year I wasn't suppose to contribute??

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  • 4 weeks later...

You can withdraw contributions made in excess of the allowed when you are ready to file your taxes and know your circumstances. Your custodian would add any earnings or growth to the contribution to determine what amount must be returned.

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