You make the callBy: National Association of Tax Professionals
March 16, 2023

Question: Charles and Stephanie are married and file a joint Form 1040, U.S. Individual Income Tax Return. Stephanie works and has a salary of $141,000. Charles, a stay-at-home grandad, does not work outside the home and is receiving Social Security ($25,000 in 2022). Their total income on Line 9 of their 1040 is $166,000. Stephanie has a retirement plan through her employer. Can Charles make a deductible contribution to an IRA in 2023?

Answer: Yes. Charles can make an IRA contribution to a Kay Bailey Hutchinson IRA by using Stephanie’s earned income to make the contribution. Even though his wife is an active participant, the couple’s combined AGI is below $218,000, which is the income threshold for MFJ IRA contributions.

Stephanie’s salary is over the contribution limit of $136,000, and since she has a plan at work, she cannot make a deductible IRA contribution. She is considered an “active participant” in her company plan and is subject to a contribution limitation on that basis.

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penAbout National Association of Tax Professionals

The National Association of Tax Professionals (NATP) is the largest association dedicated to equipping tax professionals with the resources, connections and education they need to provide the highest level of service to their clients. NATP is comprised of over 23,000 leading tax professionals who believe in a superior standard of ethics and exemplify professional excellence. Members rely on NATP to deliver professional connections, content expertise and advocacy that provides them with the support they need to best serve their clients. The organization welcomes all tax professionals in their quest to continually meet the needs of the public, no matter where they are in their careers.

The NATP headquarters is located in Appleton, WI. To learn more, visit www.natptax.com.

Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing.

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