How to Qualify For Spousal IRA

Just because you are based at home or taking a breather from the workforce, it doesn’t mean you shouldn’t start saving for your senior years. Today’s generous federal policies are helping more and more Americans accumulate that next egg which will see them through their retirement. If you are wondering about these new IRS guidelines, it will be to your advantage to research on spousal IRA to see how you can save up for the rainy days.

If you are the non-working spouse in a marriage, you can make deductible contributions to your IRA, worth up to $5,000 for the year 2009. This is possible as long as both you and your spouse file your return jointly, and the spouse who works earns enough to cover the amount of the contribution. However, if your working spouse is already covered by a retirement plan or earns a gross of between $166,000 and $176,600, this option is phased out.

A qualified retirement plan is one that the working spouse can avail of through his or her job, whether in the work force or through self-employment. If neither of you is covered by a retirement plan, you can each make a deductible IRA contribution of $5,000 for 2009. This amount increases to $6,000 if you have both reached the age of 50 and up.

Spousal IRA is also applicable if both you and your spouse work, but are not covered by a qualified retirement plan. As long as you have at least a $10,000 income earned between the both of you, you can make deductible contributions on your IRA. On the other hand, if you both work, and have both signed up for qualified retirement plans, spousal IRA will not apply unless both of you make a total AGI of only $89,000 and below.