How to File a Roth IRA Jointly

Married couples must consider IRA savings for both.

An Individual Retirement Account (IRA), as the name suggests, is a retirement account for one person. The Internal Revenue Service (IRS) recognizes IRAs as tax-sheltered programs and allows a variety of investment choices within the account. Even though the IRA is for one person, a married couple must meet the eligibility requirements to make a fully deductible contribution to a traditional IRA or a full contribution to a Roth IRA. The 2011 contribution limits are $5,000 per person annually. An eligible couple may each contribute $5,000 annually for $10,000 in total annual contributions.

Instructions

1. Look at the income phaseout ranges for married couples. Couples who don't file joint returns have very low ranges, limiting eligibility to up to $10,000 in income. Those filing joint returns have broader limitations. The Roth income range is $169,000 to $179,000 based on joint adjusted gross income. This is much simpler compared to traditional IRA ranges. If no spouse is covered by an employer plan, there is no income limit for traditional IRAs. A spouse covered by an employer plan has a phaseout range of $90,000 to $110,000. If one spouse is covered, the spouse with no coverage has a range of $169,000 to $179,000.

2. Determine the type of IRA you want to open, contingent on income eligibility. The Roth IRA phaseout range means you can make a full contribution below the range, partial contribution within the range and no contribution above the range. Roth IRAs are funded with after-tax dollars and grow tax-free. If you don't meet the income guidelines, your only option may be traditional IRAs. The phaseout ranges for traditional IRAs mean you can make a fully tax-deductible contribution below the range, partially deductible contributions within the range and non-deductible contributions over the range. Traditional IRAs reduce annual income, defer taxes on the growth and are added to income when funds are taken out.

3. Make your contributions according to your budget allotment. If you are able to make the maximum contributions, place $5,000 in an IRA for you and $5,000 for your spouse. If you cannot afford the full contribution, split it or contribute to one IRA. Funds are considered marital property in most states in the event of divorce.

4. Claim deductible IRA contributions on personal tax return Form 1040, line 32 if you are making deductible traditional IRA contributions. You deduct nothing if you are making Roth contributions.

References

• IRS: 2011 IRA Contribution and Deduction Limits
• IRS: Form 1040 (PDF)