Spousal IRA

I cannot stress enough the importance of saving money using Roth IRA. Roth IRA is a great vehicle to save money as the investment proceeds from this account are completely tax free. That means that if you make a 20%, 30% or any number of profit on your investment, IRS cannot ask you to pay income on that profit.

Which makes me think to open a Roth IRA account for my wife also. She does not work and therefore has no income to report on our joint Income tax. The question is can I open a Roth IRA for her too and contribute the maximum allowable limit in her account also (in addition to making my 100% contribution to my Roth IRA). The answer is YES, you can contribute to your spouse’s Roth IRA account (even if s/he does not work).

IRS Link : http://www.irs.gov/newsroom/article/0,,id=134667,00.html

This entry was posted on 5 Aug 2009 at 20:47 and is filed under Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.