collprof[at]yahoo.com wrote:

- quote -

Even if you are not in business in order to have such
deductible expenses, and even if you just pay her to clean
ya'll's house, she would have to report the income, pay the
se tax, and then deduct for the IRA, a washout, will more SE
tax than it's worth.

ChEAr$,
Harlan Lunsford, EA n LA

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<collprof[at]yahoo.com> wrote:

- quote -

You won't zero out the SE tax of paying your wife contract
labor.

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collprof[at]yahoo.com" <collprof[at]yahoo.com> wrote:

- quote -

The IRA deduction will NOT zero out the tax from anything
you "pay" your wife. Since the amount will be more than
$400, there will be a liability for social security taxes
(either on you as employer or via self-employment tax.) If
she is truly an employee of your business, you will probably
have to pay state and federal unemployment and disability
taxes, too.

If IRS ever looks closely, they will see that this is a sham
and could impose penalties as well.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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<collprof[at]yahoo.com> wrote

- quote -

Yeah, I'm thinking "Social Security and Medicare" taxes for
starters. Federal and State Unemployment taxes too.

7.65% of gross, plus another $350 - $400 depending on the
amount you pay her for her maid services.

She could take a job someplace.

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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<collprof[at]yahoo.com> wrote:

- quote -

It sounds to me like you're trying to fake some earned
income for your wife to support an IRA contribution, and no,
you can't. Fraud is fraud, even if it costs you money in
the short term.

She could always go get a real job and let you do the
housework in your newly-found spare time.

--
Phil Marti
Clarksburg, MD

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"collprof[at]yahoo.com" <collprof[at]yahoo.com> writes:

- quote -

It's not zeroed out, since either both of you (if you make
her an employee) or her (if you make her a contractor) would
still have to pay FICA or self-employment tax.

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

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There is no provision for IRA for wife when husband receives
100% retirement and wife does not work. the tax law states
income must be produced in order for IRA deduction to take
place. can i pay my wife for a consulting job or cleaning
services to produce taxable income for her so that she may
buy an IRA? i realize i am incurring taxable income but the
deduction zeroes it out. anyone have any thoughts?

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