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A spousal IRA enables an earning spouse to fund an IRA for the other spouse, with certain limitations on deductions. Up to $8,000 (or $9,000 if both spouses are at least age 50) can be contributed in the aggregate to IRAs for both spouses, although no more than $4,000 (or $4,500 for a spouse at least age 50) in each IRA. For example, a working husband could contribute up to $4,000 to his IRA (or $4,500 if he is at least age 50) and contribute an additional amount to an IRA for his non-working wife (up to $4,000, or $4,500 if she is at least age 50).
Among the important spousal IRA conditions are the following:
- the couple must be married;
- at least one spouse must have compensation;
- a joint federal tax return must be filed;
- an IRA must be established for the non-compensated spouse;
- the non-compensated spouse must be under the age of 70 1/2.
A working spouse over age 70 1/2 can contribute up to maximum allowed ($4,000 or $4,500 depending on age) on behalf of the non-compensated spouse, if the non-compensated spouse is under age 70 1/2 and the above requirements are met, even if the working spouse cannot on account of age contribute to his or her own IRA.
Each spouse must have his or her separate IRA; both spouses cannot contribute to the same IRA. If the non-compensated spouse later receives compensation, he or she does not have to open another IRA for future contributions. Those future contributions can be deposited in the spousal IRA which has already been established.
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