IRA Contributions when Spouse makes $1,500 anual income?

#4 03-03-2004, 12:53 AM

Thanks everyone for clearing that up.

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#3 03-01-2004, 05:48 PM

mydeadpresidents[at]yahoo.com (Mak Wilson) wrote:

- quote -

> I make about $40,000 a year and my wife is a homemaker.
> Very soon we will be opening our first IRA (for the year
> 2003) However, last summer she made about $1,500 in gross
> income. (We are both under 50) My question is about how
> much my wife can contribute.
> Of course, I can contribute $3,000. It's my understanding
> that if she was not working at all that she could also
> contribute $3,000. However, because she DID work is she
> limited to a contribution ceiling equal to 100% of her pay
> last year? If so, would that mean she's limited to $1,500?
> BTW, I'm cutting it close and have been researching online
> brokerages. I will probably go with Vanguard, but I'm open
> to other online brokerage suggestions....? How quickly can
> a instituion get the account active once I get the ball
> rolling? (I'll probably apply online)

As long as you file a MFJ return, and your combined earned
income is over $6,000, you can EACH contribute to an IRA.

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#2 02-29-2004, 07:18 PM

mydeadpresidents[at]yahoo.com posted:

- quote -

> I make about $40,000 a year and my wife is a
> homemaker. Very soon we will be opening our
> first IRA (for the year 2003) However, last
> summer she made about $1,500 in gross
> income. (We are both under 50) My question
> is about how much my wife can contribute.
> Of course, I can contribute $3,000. It's my
> understanding that if she was not working at
> all that she could also contribute $3,000.
> However, because she DID work is she limited
> to a contribution ceiling equal to 100% of her
> pay last year? If so, would that mean she's
> limited to $1,500?

You can contribute $3000 for each spouse. There's a
worksheet on page 30 of the 1040 Instruction book, that you
can fill out and prove this for yourself.

Bill

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#1 02-29-2004, 07:18 PM

mydeadpresidents[at]yahoo.com (Mak Wilson) writes:

- quote -

> I make about $40,000 a year and my wife is a homemaker.
> Very soon we will be opening our first IRA (for the year
> 2003) However, last summer she made about $1,500 in gross
> income. (We are both under 50) My question is about how
> much my wife can contribute.

$3,000. As long as you're both under 70 1/2, file a joint
return, and have $6,000 of taxable compensation between you,
each of you can make a $3,000 contribution to a traditional
IRA.

Phil Marti
Topeka, KS

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

02-29-2004, 06:58 PM

mydeadpresidents[at]yahoo.com (Mak Wilson) writes:

- quote -

> Of course, I can contribute $3,000. It's my understanding
> that if she was not working at all that she could also
> contribute $3,000. However, because she DID work is she
> limited to a contribution ceiling equal to 100% of her pay
> last year? If so, would that mean she's limited to $1,500?

Whether or not she works is irrelevent. Assuming you are
filing jointly, as long as the combined earned income covers
the IRA contributions (which it does, since you said you
earned $40K), there's no problem.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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#-1 02-26-2004, 05:12 PM

I make about $40,000 a year and my wife is a homemaker.
Very soon we will be opening our first IRA (for the year
2003) However, last summer she made about $1,500 in gross
income. (We are both under 50) My question is about how
much my wife can contribute.

Of course, I can contribute $3,000. It's my understanding
that if she was not working at all that she could also
contribute $3,000. However, because she DID work is she
limited to a contribution ceiling equal to 100% of her pay
last year? If so, would that mean she's limited to $1,500?

Thanks.

BTW, I'm cutting it close and have been researching online
brokerages. I will probably go with Vanguard, but I'm open
to other online brokerage suggestions....? How quickly can
a instituion get the account active once I get the ball
rolling? (I'll probably apply online)

Thanks again.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

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