Spousal IRA

Spousal IRA

An individual retirement account in the name of an unemployed spouse.

Spousal IRA

An IRA where the beneficiary the spouse of the person making the contributions. This provides a steady stream of income for the spouse after the contributor's retirement or death, especially when he/she has little or no other income. This is especially useful should the spouse who earns the income die prematurely. A spousal IRA has the same terms as any other IRA and may be either a traditional IRA or a Roth IRA.

spousal IRA

An individual retirement account in the name of a nonworking spouse. A spousal IRA may be funded by the working spouse up to a maximum amount established by law. There is also a limit on annual contributions to the combination of IRAs of the working and nonworking spouses.
References in periodicals archive ?
Same-sex married couples were denied the ability to file joint tax returns, make spousal IRA contributions, offset one spouse's income with the other spouse's losses, and generally treat their tax situation the same as opposite-sex married couples.
Keep in mind that included in the 125 laws to date that have been passed and signed by President Barack Obama are some real pressing policy issues like Public Law No: 113-10 which was passed "to specify the size of the precious-metal blanks that will be used in the production of the National Baseball Hall of Fame commemorative coins" and Public Law No: 113-22 "to rename section 219(c) of the Internal Revenue Code of 1986 as the Kay Bailey Hutchison Spousal IRA.
With the Spousal IRA, nonworking wives can contribute a lesser amount, usually up to $5,000.
This book, aimed at taxpayers, includes information on retirement distribution planning, IRA beneficiary forms, inherited IRA and spousal IRA rules, estate planning and retirement accounts, and tax planning.
Military members contributing to an IRA or spousal IRA need to seek tax advice if they contribute to an IRA and have little or no taxable earnings for the year due to the combat pay exclusion.
The sole exception has been the Spousal IRA that was only recently raised from $250 to a $2,000 annual contribution limit.
First, the spousal IRA is available only to couples filing jointly; these couples can generally take the full $4,000 deduction on their income taxes if neither person is covered by a pension plan.
unemployed or employed by an employer that does not provide a retirement plan), a deductible spousal IRA contribution can be made if the couple's MAGI does not exceed $166,000 (phaseout starts at $156,000 and occurs over a $10,000 range).
Other factors in 2004 affecting tax- lowering strategies include record-low mortgage interest rates, setting up a health savings account, spousal IRA contributions and tax-deferred Roth IRAs.
Finally, the tax case included an excess spousal IRA contribution.
If taxpayers have contributed the maximum allowed to various tax-deferred programs, they should consider contributions to IRAs, particularly for nonworking spouses, who will be permitted a $2,000 spousal IRA contribution beginning in 1997 instead of the $250 currently permitted if the combined compensation of both spouses is at least equal to the amount contributed to the IRA.
The surviving spouse should name a designated beneficiary of the spousal IRA rollover as soon as possible, to reduce the required minimum distribution from the new IRA.