I want to establish a traditional individual retirement arrangement (IRA) for my spouse and I, but I need additional information. What is the most I can contribute during the tax year?
If both you and your spouse work and both have taxable compensation, each of you can contribute up to $2,000 (or the amount of each IRA owner's compensation, if less) to a separate traditional IRA. Even if one spouse has little or no compensation, up to $2,000 can be contributed to each IRA if combined compensation is at least equal to the amount contributed to both IRAs and you file a joint return. You can contribute $2,000 to a separate IRA for your nonworking spouse if you file a joint return. Your total contribution to both your IRA and the spousal IRA for this year is limited to the smaller of $4,000 or your taxable compensation. You cannot contribute more than $2,000 to either IRA for the year. For additional information, refer to Tax Topic 451, Individual Retirement Arrangements (IRAs), or Publication 590, Individual Retirement Arrangements (IRAs) (Including Roth IRAs and Education IRAs).
References:
- Publication 590, Individual Retirement Arrangements (IRAs) (Including Roth IRAs and Education IRAs)
- Tax Topic 451, Individual retirement arrangements (IRAs)
Can I take an IRA deduction for the amount I contributed to a 401(k) plan last year?
No. A 401(k) plan is not an IRA. However, the amount you contributed is not included as income in box 1 of your W-2 form so you don't pay tax on it for 2000. For more information, refer to Tax Topic 424, 401(k) Plans, Publication 575, Pension and Annuity Income, or Publication 560, Retirement Plans for Small Business.
References:
If I am covered by a employer sponsored retirement plan for part of the year, but work the rest of the year for an employer without a retirement plan, how much of my earnings may I deduct for a traditional IRA?
The amount you can deduct will be determined by your modified Adjusted Gross Income (AGI) and filing status. For specific information refer to Publication 590, Individual Retirement Accounts (IRAs) (Including Roth IRAs and Education IRAs).
References:
- Publication 590, Individual Retirement Arrangements (IRAs) (Including Roth IRAs and Education IRAs)
- Tax Topic 451, Individual retirement arrangements (IRAs)
Can an individual who is contributing to a SEP-IRA also contribute to a traditional IRA?
Yes, if they meet certain requirements. A SEP-IRA is considered a retirement plan, so the Adjusted Gross Income (AGI) limitations have to be considered. If your AGI, which is computed after the SEP contribution, were in excess of those limits, then the IRA contribution that you make would be nondeductible. The information on the AGI limits is in Publication 590, Individual Retirement Arrangements (IRAs) (Including Roth IRAs and Education IRAs), in the section How Much Can I Deduct?
References:
- Publication 590, Individual Retirement Arrangements (IRAs) (Including Roth IRAs and Education IRAs)
- Tax Topic 451, Individual retirement arrangements (IRAs)
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