Traditional IRA Deposit Limits for Married Couples

by Mike Parker

    Your individual retirement account belongs to you, and your spouse's IRA belongs to him or her. Federal tax law dictates how much each person can contribute to an IRA each year, and this amount is adjusted from time to time. Deposit limits are based on earned income, but the rules apply differently to married couples.

    Maximum Deposits

    The most you can contribute to your traditional IRA for the 2012 tax year is $5,000 if you are younger than 50 years old. If you are at least 50, you can contribute up to $6,000. Once you reach age 70 1/2, you can no longer contribute to a traditional IRA. Maximum contribution limits increase to $5,500 for the 2013 tax year, or $6,500 if you are at least 50 years old. The maximum deposit limits apply to everyone, whether you are single or married.

    Earned Income

    Your ability to contribute the maximum amount allowed by law to your traditional IRA is limited by your earned income. The Internal Revenue Service considers money you receive as compensation for work performed, either from your own business or from someone else, to be earned income. Unearned income such as stock dividends does not count toward IRA contributions. You cannot contribute more than 100 percent of your earned income to an IRA. For example, if you worked part-time and earned $4,300 in wages and you also received $35,000 in dividend and interest income from your investments, your traditional IRA contribution would be limited to $4,300. This limitation applies regardless of whether you are married or single.

    Spousal IRA

    If you are married, you and your spouse can both contribute to traditional IRAs, even if only one of you had earned income. Your maximum contributions would be limited by your combined earned income. For example, if you are both younger than 50 years old and have earned income of $50,000, you could each contribute the maximum of $5,000 to your traditional IRAs, for a total of $10,000. If you earned $8,000 and your spouse earned $3,000, you could still both contribute the maximum amount, since your combined earned income exceeds $10,000 for the 2012 tax year.

    Tax Deductions

    As long as you or your spouse have earned income and you are under age 70 1/2, you can open and contribute the maximum amount allowed by law to a traditional IRA. Your ability to deduct those contributions might be limited based on your income, your filing status and whether you or your spouse was covered by a retirement plan at work. For example, if neither you nor your spouse is covered by a workplace retirement plan, you file your return using the married filing jointly status and your modified adjusted gross income is more than $173,000, your deduction for contributing to a traditional IRA will be reduced or eliminated. If you are covered by a retirement plan at work and file your return using the married filing separately status, your deduction will be reduced regardless of your income, and eliminated if your modified adjusted gross income is at least $10,000.

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    About the Author

    Mike Parker is a full-time writer, publisher and independent businessman. His background includes a career as an investments broker with such NYSE member firms as Edward Jones & Company, AG Edwards & Sons and Dean Witter. He helped launch DiscoverCard as one of the company's first merchant sales reps.

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