Can a Husband Contribute to an IRA for an Unemployed Wife?
IRA accounts allow individuals to save for retirement in a way that provides multiple benefits, including the ability to make contributions based on your income and receiving tax deductions for contributions. Contributions into an IRA account can have additional benefits for married couples, particularly in a case where one spouse is unemployed. In such a case, existing policies render possible for a husband to continue the retirement savings for himself and his unemployed wife.
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The Rules
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Unlike employer-provided retirement plans such as 401(k) accounts, IRA accounts allow married couples to independently save for retirement. However, depending on the type of account (Roth or Traditional), married couples may be unable to obtain an account, which is particularly true for those wishing to invest in a Roth IRA account. Those with a combined income of more than $176,000 annually or a modified adjusted gross income of more than $166,000 cannot invest into the account.
The Non-working Spouse
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A wife who is unemployed can also make contributions into an IRA account in spite of her husband's contributions provided both contributions do not exceed the limits for both Roth and traditional IRA accounts. A husband with an income between $169,000 and $179,000 who has a qualified retirement plan such as a 401(k) plan provided by an employer can receive a tax deduction for making contributions to his wife's account. A working husband's contribution and eligibility for tax deductions may depend on the type of IRA account.
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Roth Accounts
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Though Roth IRA accounts may not provide immediate tax breaks, they allow individuals to withdraw their retirement savings without tax consequences. Additionally, maximum contributions for those, including married couples, over the age of 50 is $6,000 as of 2011. Under the age of 50 the maximum contribution is $5,000 as of 2011. Roth IRA accounts have spousal policies which permit a working husband to make contributions into his wife's account. However, as noted in a March 2009 Fox Business article, a working spouse can only contribute to the account of a non-working spouse if they have filed jointly on their federal income taxes.
Traditional IRA's
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Like Roth accounts, traditional IRA accounts provide the same maximum contribution limits. In fact, married couples may have both a Roth and traditional IRA account provided their contributions to both accounts reach the limits. Traditional IRA's are tax-deductible, and there are no earnings guidelines for making contributions. Spousal policies for traditional IRA accounts also allow contributions into a non-working spouse's account. However, a husband who earns between $89,000 and $109,000 cannot deduct contributions made into his own traditional IRA account or for his non-working spouse's account.
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