An individual must have “earned income” in order to contribute to an Individual Retirement Arrangement. Actually, this statement is not entirely correct. A “Spousal IRA” is a special type of account that is funded with the working spouse’s income. IRS guidelines allow an employed spouse to contribute to their stay-at-home husband or wife’s IRA account. Technically, there is no such thing as a Spousal IRA. It is just a term used for IRA accounts that allow non-working spouse to rely on a working spouse’s income to make IRA contributions.
The following requirements must be met to contribute to such an account:
• You must be married
• You must file a joint income-tax return
• You must have earned income of at least the amount you contribute to both IRAs
Although the contribution limits for a Spousal IRA may be the same as an IRA, the contributions made by the working spouse if covered by a qualified plan, may or may not be tax deductible depending on the couple’s adjusted gross income. However, if the working spouse is not covered by a qualified retirement plan, the contributions will be deductible.
So for all of you stay-at-home spouses out there, you too can start saving for your retirement and take control of your financial future with a
Spousal IRA. And remember, you have until April 15th to fund your account.
Please consult your tax or legal advisor(s) for questions concerning your personal tax or financial situation.
By Munzer Ghosheh, Business Development Manager
(310)899-3811
MGhosheh@theentrustgroup.com