Roth IRA Limits for a Non-Working Spouse

Staying at home doesn't rule out Roth IRA contributions if your spouse is working.

Staying at home doesn't rule out Roth IRA contributions if your spouse is working.

If you're not working, Internal Revenue Service rules usually don't allow you to contribute to your Roth IRA. However, if you're married and file a joint return, you might be able to contribute to a Roth IRA for the year because of special spousal IRA contribution rules.

Combined Compensation

You can't contribute to a Roth IRA without compensation, which includes self-employment income, wages and alimony. When you file a joint return, it doesn't matter who earned the money because it's all on the same return. So, you can count on your spouse to bring home enough pay so that you can fund your Roth IRA. However, if you file separate returns, you're out of luck, because then, you're not allowed to share.

Double Dipping Prohibited

As a couple, you still must have sufficient compensation to cover both your IRA contributions. Suppose your spouse had a rough year and only earned $7,000. If he puts $5,000 in his IRA -- either a Roth or traditional -- that leaves only $2,000 for you to put in yours, even if you can afford to put in more. The annual contribution limit for IRAs is $6,000 for 2013, so as long as your spouse brings home at least $12,000, you're both eligible to fully fund your IRAs.

Income Limits

Even with the compensation requirement satisfied, you still have to worry about the modified adjusted gross income (MAGI) limits on contributing to a Roth IRA. When you file jointly, all your spouse's income -- and any unearned income you have, such as investment income or interest -- increases your MAGI. On the bright side, the MAGI limit for the married-filing-jointly status is the largest of any filing status. For 2013, your limit starts phasing out at $178,000 and completely disappears at $188,000.

MAGI Calculations

Your MAGI starts with your adjusted gross income (AGI), but makes a few potentially significant changes. First, you get to take out any income that results from a Roth IRA conversion that year. For example, if you converted $10,000 from a traditional IRA to a Roth that year, you can take $10,000 off your AGI. But, you have to add back any deductions you take for tuition and fees, student loan interest and traditional IRA contributions. You also have to add back any income you excluded as foreign earned income or housing, savings-bond interest used for education, or employer-provided adoption benefits. For example, if you claimed $2,000 in student loan interest, you have to increase your AGI by $2,000 when figuring your MAGI.


About the Author

Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."

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