Internal Revenue Service rules do not permit joint ownership of traditional or Roth IRA accounts. However, some rules governing IRAs apply specifically to married couples when one or both spouses have IRAs. These IRS guidelines for spousal IRA contribution limits help married couples coordinate their contributions and maximize the retirement savings potential of their IRAs.
You and your spouse must file a joint tax return to take advantage of IRS guidelines for spousal contributions. Under the IRS spousal IRA rules, both spouses can make contributions to their accounts even if only one has earned income. Spouses can also make contributions to each other’s IRAs. A married couple must have adjusted gross income equal to or greater than the combined contributions they make to their IRAs.
A husband and wife can each contribute up to $5,000 per year to an IRA before age 50. A spouse who is age 50 or older can make contributions up to $6,000 each year. The combined maximum contribution is thus $10,000 before 50, increases to $11,000 when one spouse is 50, and increases to $12,000 when both spouses are 50 years old or older.
If a married couple’s adjusted gross income exceeds IRS limits, the amount each spouse can contribute to a Roth IRA is reduced and eventually eliminated. As of 2012, the allowed contribution of $5,000 or $6,000 per spouse started to decrease when the couple’s AGI reached $173,000 and was entirely phased out when AGI reached $183,000. However, if you are married and filing a separate return, the phase-out range starts at zero and is complete when AGI reaches $10,000. The IRS adjusts phase-out limits each year, so check its website for current figures.
For traditional IRAs, phase-out rules apply only if one or both spouses are covered by a retirement plan at work. If neither spouse is covered, there are no income limits for making deductible contributions to a traditional IRA. Traditional IRA phase-out eliminates only the tax deduction for making contributions, so you can continue to make nondeductible contributions to a traditional IRA. As of 2012, the deduction when you are covered by a retirement plan at work and file a joint return is phased out starting when AGI reaches $92,000 and complete at $112,000. If your spouse is covered and you are not, the phase-out range is $173,000 to $183,000. For married people filing separate returns, the phase-out range is zero to $10,000.