Maxing out 306b

sinn
sinn Member Posts: 12 Newcomer
in Credits/Deductions

My wife maxes out her 403(B) so her income on her W-2 is around 5K, yet her social security wages show 37K. Can she still max out her IRA, or is she limited to the 5K amount in box #1 of her W-2? We are married and file jointly.

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  • RustyL
    RustyL FreeTaxUSA Agent Posts: 29
    Answer ✓

    Hey sinn,

    When filing a joint return, your IRA contributions are limited by two things, first there is a $7,000 limit ($8,000 if 50 or older) per person, and secondly they are limited by the total taxable compensation on your return, taxable compensation being earned income (i.e. Wages, Schedule C income).  So, if the earned income on your return is $10k, regardless of who earned it, you and your spouse would be able to contribute up to $7,000 individually, and $10,000 collectively.

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