Retirement Planning: Benefits of Spousal IRA'S
There are many rules that pertain to IRAs and one that many people may not know about is the rule governing spousal IRAs. In general, an investor's IRA contribution cannot exceed the investor's income during a given year. Because of this rule, investors who earn less than the maximum annual IRA contribution ($5,000 for those under age 50, $6,000 for those aged 50 and older) are at a disadvantage when making an IRA contribution. But when spouses file jointly, and one partner's income is higher, the partner with less income can make an IRA contribution based on the income of the partner who earns more.
The maximum that a spouse who earns less can contribute is the smaller of the following:
- $5,000 for those under age 50, $6,000 for those aged 50 and older.
- Total compensation included in gross income for both spouses minus the higher-earning spouse's IRA contribution.
Tax Deductions
A contribution to a traditional spousal IRA may be tax deductible. For the 2010 tax year, if the higher-earning spouse is not covered by an employer-sponsored retirement plan, the lower-earning spouse may deduct either the full amount of the contribution or 100% of the lower-earning spouse's compensation, whichever is less.
A full deduction also is permitted if the higher-earning spouse is covered by an employer-sponsored retirement plan, the lower-earning spouse is not, and the couple's modified adjusted gross income (MAGI) is less than $167,000.
The amount of the tax deduction is phased out when the higher-earning spouse is covered by an employer-sponsored retirement plan, the lower-earning spouse is not, and the couple's MAGI is between $167,000 and $177,000. If the couple's MAGI is $177,000 or higher and the higher-earning spouse is covered by an employer-sponsored retirement plan, no deduction is permitted.
The potential for a tax deduction applies only if the IRA in question is a traditional IRA. Contributions to a Roth IRA are never tax deductible, and a full contribution to a Roth IRA is permitted for married couples filing jointly only when their MAGI is less than $167,000. Partial contributions are permitted for couples with a MAGI between $167,000 and $177,000, but no contribution is permitted for those with a MAGI that exceeds $177,000. Restrictions, taxes, and penalties may apply. Unless certain criteria are met, Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted.
Because rules that apply to spousal IRAs are complicated, you may want to consult a tax professional
to make sure you understand the rules as they apply to your situation.
© 2009 Standard & Poor's Financial Communications. All rights reserved.
© Newsletter, Kelly C Ruggles, Spokane, WA.
Kelly C. Ruggles , Spokane, WA., does not intend to provide personalized investment advice through this publication and does not represent the strategies or services discussed are suitable for any investor. Investors should consult with their financial advisors prior to making any investment decisions.
| No-Bake Butterscotch Haystacks
1 Cup Peanut Butter 1 large can chow mein noodles
1/2 package or 6 oz of butterscotch morsels
Melt peanut butter and butterscotch together. Can be done on the stove top or in a microwave. Pour over noodles, mix well. Drop by tablespoon on wax paper. Freeze for a couple of hours. May be
stored in a loose fitting topped cookie jar. Enjoy.
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Happy Holidays! Enjoy the Season.
After being issued a "Triple Dog Dare" Ralphie's Brother, The "major award"
Ralphie's friends tongue gets stuck to a pole. Randy in his snowsuit. Ralphie's dad won.
It is that time of year again... The Holiday Season! Christmas decorations are lining the aisles of our favorite stores, and we are looking for that perfect gift for that special someone without breaking the bank.
One thing remains special and constant during this busy season. During the month of December, hundreds of children discover, for the first time, that holiday classic: "A Christmas Story."
The film has become a holiday classic and is known to be shown numerous times on television during the Christmas season, usually in a 24-hour marathon.
The plot revolves around nine-year-old Ralphie Parker who wants only one thing for Christmas, "an official Red Ryder carbine-action 200-shot range model air rifle with a compass in the stock, and this thing which tells time." Between run-ins with his younger brother, Randy and having to handle the school bully, Ralphie does not know how he will ever survive long enough to get the BB gun for Christmas.
When Ralphie asks his mother for the Red Ryder BB gun for Christmas, she says, "No, you'll shoot your eye out." Next, when Ralphie writes an essay about wanting the BB gun, Miss Shields, his teacher at Warren G. Harding Elementary School, gives Ralphie a C+ and on the essay she writes, "P.S. You'll shoot your eye out". Finally, Ralphie asks an obnoxious department store Santa Claus for a Red Ryder BB gun, and Santa responds, "You'll shoot your eye out, kid. Merry Christmas! Ho, ho, ho!" and then he kicks Ralphie with his boot sending him down a long slide.
"A Christmas Story" is a hilarious family film for all ages. It is about parents trying hard to make their children safe and happy, and of kids learning to appreciate their youth before it is gone in a flash.
We wish you a Wonderful Holiday Season and a Happy New Year!
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Merry Christmas and Happy New Year
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God sent a star to light
the night for
The Way, The Truth, The
Life--His Son.
He sent the Light of Life
to prove His heart
so we would invite His
Son into our own.
God has given us all the
light we'll ever
need to find peace on
earth,
goodwill to men.
Pamela F Dowd
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Give the following Gifts
To your enemy . . .forgiveness,
To your opponent . . .tolerance.
To a friend . . . your heart.
To a customer . . . service.
To all men . . .charity.
To every child . . . a good example.
To yourself . . .respect.
Author Unknown
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Joy
Somehow, not only for
Christmas
But all the long year through
The joy that you give to others
Is the joy that comes back to
you.
John Greenleaf Whittier
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Merry Christmas to You and Your Family...
Kelly and Susie
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Kelly C. Ruggles