How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Lane Your Own Question

Lane
Lane, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3704
Experience:  Providing Financial & Tax advice since 1986
Type Your Tax Question Here...
Lane is online now
A new question is answered every 9 seconds

For married filers where I am covered by a company plan (401k)

Resolved Question:

For married filers where I am covered by a company plan (401k) but my spouse is not, can my souse and I deduct our full IRS contribution(10,000) or can only my wife deduct her IRS contribution (5000.00)? (Assumption: Joint gross income in 2013: 120,000.00, My wife and I contribute 10,000 to IRA) thanks
Submitted: 8 months ago.
Category: Tax
Expert:  Lane replied 8 months ago.

Lane :

Hi, for 2013,



  • $5,500 ($6,500 if you’re age 50 or older), or

  • your taxable compensation for the year. Now, on the deductibility?

Lane :

You can both contribute, but only your spouse can deduct

Lane :

To frill down just a bit more ... heres the table entitled


Like Print

2013 IRA Deduction Limits - Effect of Modified AGI on Deduction if You Are Covered by a Retirement Plan at Work
Lane :












































If Your Filing Status Is...


And Your Modified AGI Is...Then You Can Take...
single or
head of household

$59,000 or less



a full deduction up to the amount of your contribution limit.



more than $59,000 but less than $69,000



a partial deduction.



$69,000 or more



no deduction.


married filing jointly orqualifying widow(er)

$95,000 or less



a full deduction up to the amount of your contribution limit.



more than $95,000 but less than $115,000



a partial deduction.



$115,000 or more



no deduction.


married filing separately

less than $10,000



a partial deduction.



$10,000 or more



no deduction.


If you file separately and did not live with your spouse at any time during the year, your IRA deduction is determined under the "Single" filing status.
Lane :

.

Lane :

An this one is entitled ...


if You Are NOT Covered by a Retirement Plan at Work
Lane :









































If Your Filing Status Is...


And Your Modified AGI Is...Then You Can Take...
single, head of household, or qualifying widow(er)

any amount



a full deduction up to the amount of your contribution limit.


married filing jointly or separately with a spouse who is not covered by a plan at work

any amount



a full deduction up to the amount of your contribution limit.


married filing jointly with a spouse who iscovered by a plan at work

$178,000 or less



a full deduction up to the amount of your contribution limit.



more than $178,000 but less than $188,000



a partial deduction.



$188,000 or more



no deduction.


married filing separately with a spouse who is covered by a plan at work

less than $10,000



a partial deduction.



$10,000 or more



no deduction.


If you file separately and did not live with your spouse at any time during the year, your IRA deduction is determined under the "Single" filing status.
Lane :

So you can see that since you are at 120000, you are over the DEDUCTION limit; $115,000

Lane :

But for your wife, since the covered spouse is under 178,000, her contribution is full deductible

Lane :

And, again the limit this year on AMOUNT contributed is 5,500 (6,500 if you are over age 50)

Lane :

To recap, you can CONTRIBUTE 11,000 total (13,000, if you're both over 50) and the wife's IRA based on the information you provided would be fully deductible

Lane :

One final piece here; Note that the income number that's used is MAGI (Modified Adjusted Gross Income), rather than Gross Income

Lane :

To arrive at your modified AGI, start with your adjusted gross income and then add back the following items:



  • Any deduction you claimed for a regular contribution to a traditional IRA.

  • Any deduction you claim for student loan interest or qualified tuition and related expenses.

  • Any income you excluded because of the foreign earned income exclusion.

  • Any exclusion or deduction you claimed for foreign housing.

  • Any interest income from series EE bonds that you were able to exclude because you paid qualified higher education expenses.

  • Any employer-paid adoption expense you excluded.

  • Any amount claimed as domestic production activities deduction.


Note that you are not required to add back any contribution you made to an employer plan such as a 401k plan. If you are running up against the limit for modified AGI, one way to reduce that number is XXXXX make deductible contributions to an employer plan.

Lane :

That should be everything

Lane :

QUestions?

Lane :

I still don't see you coming into the chat session, so I'll move us to the "Q&A" mode. … Maybe that will help … (We can still continue a dialogue there, just not in real-time chat, as we can here)

Lane :

If this has helped, I would appreciate a feedback rating of 3 (OK) or better (excellent, is ideal)… That's the only I get credit for the work.


However, if you need more on this, please come back here, so you won't be charged for another question.

Lane :

Let me know if you have questions at all ...

Lane :

Lane

Lane, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3704
Experience: Providing Financial & Tax advice since 1986
Lane and 4 other Tax Specialists are ready to help you
Expert:  Lane replied 8 months ago.

Hi Sunny,

 

Good to see you here.

 

Our chat has ended, but you can still continue to ask me questions here until you are satisfied with your answer. Come back to this page to view our conversation and any other new information.

What happens now?

If you haven’t already done so, please rate your answer above. Or, you can reply to me using the box below.

 

Let me know

 

Lane

 

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.