Recent tax law changes permit most couples to contribute up to $2000 each to their IRAs as long as their combined compensation is at least $4000.
This allows a lower-compensated spouse to take advantage of the tax savings offered by an IRA. A Spousal IRA may be set up as a traditional IRA or as a Roth IRA.
A joint federal income tax return must be filed every year a Spousal IRA contribution is made. If one spouse is not covered by an employer retirement plan, contributions to a traditional IRA for the noncovered spouse can be federal income tax deductible. This deduction is phased out for couples with a combined adjusted gross income between $150,000 and $160,000. The deductible contributions and earnings of a traditional IRA are subject to federal income tax when received.
Find out more information about Spousal IRAs in the Comparison of State Farm's Traditional and Roth IRAs.
Issued by:
State Farm Life Insurance Company
(Not Licensed in New York or Wisconsin)
State Farm Life and Accident Assurance Company
(Licensed in New York and Wisconsin)
Home Offices: Bloomington, Illinois
IL - 25