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SEP & IRA - -Married Filing Joint taxpayers with AGI of $

SEP & IRA - -Married...
SEP & IRA - -Married Filing Joint taxpayers with AGI of $ 167,116 -Only one spouse works - Receives a W2 from a S-corporation that he owns 50/50 with spouse. -Working spouse is covered by a SEP at his W2 job that contributed $ 6700 for 2017. -There is no Schedule C income. -Non-working spouse contributed $ 2500 into Traditional IRA and $ 3000 to ROTH IRA Can the Working Spouse contribute money into a Traditional IRA? Is being covered at work by a SEP considered "covered by a retirement plan"? Thanks, JW
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3/8/2018
Chad EA, CFP ®
Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional
Category: Tax
Satisfied Customers: 2,149
Experience: Federally licensed IRS Enrolled Agent, Certified Financial Planner (R), MBA
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The working spouse is covered by a retirement plan and may contribute to an IRA.

Box 13 on the Form W-2 the tax payer receives from the S Corp should contain a check in the “Retirement plan” box when covered by a plan.

"You’re covered by an employer retirement plan for a tax year if your employer (or your spouse’s employer) has a:

  • Defined contribution plan (profit-sharing, 401(k), stock bonus and money purchase pension plan) and any contributions or forfeitures were allocated to your account for the plan year ending with or within the tax year;
  • IRA-based plan (SEP, SARSEP or SIMPLE IRA plan) and you had an amount contributed to your IRA for the plan year that ends with or within the tax year; or

____

The working spouse may still contribute to a IRA, but the contribution will not be deductible, because of the AGI.

No deduction

  • "If you're covered by a workplace retirement plan: $119,000 or more"

Please let me know if you have any questions JW!

Thank you

Chad EA, CFP ®
Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional
Category: Tax
Satisfied Customers: 2,149
Experience: Federally licensed IRS Enrolled Agent, Certified Financial Planner (R), MBA
Verified
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Customer reply replied 1 month ago
Thanks. Not the answer I wanted but it was the one I thought was correct.Have a great weekend. I'm sure I will have more questions during the next week!!

I am just happy to hear you are making it through another tax season!

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