My wife got her SSN only in Jan07 even though she started working in Nov 06(with a dummy SSN). Without an SSN, a retirement a/c could not be opened and hence she could not contribute in 2006. In that case, will she be eligible for an IRA investment for 2006? Our AGI (filing jointly)is less than the prescribed limits and is eligible for an IRA.
We would appreciate a clear response.
Thanks,
2007-04-02 18:18:54 · 4 answers · asked by ksakrish 1 in Business & Finance ➔ Taxes ➔ United States
Since your adjusted gross income is under the phase out limits of an IRA it doesn't matter if she particiapted in a retirement plan or not.
You both can make a deductible IRA and also claim the retirement savings credit.
Being in a retirement plan at work only matters if you are above the agi limits for your filing status.
2007-04-02 22:47:37 · answer #1 · answered by waggy_33 6 · 0⤊ 0⤋
all depends on if your wife was legal or not...if she was not legal then she was not eligible for her company retirement benefits. As such, the company should reissue a w-2 without that box checked. This is true even if they didn't know that she was illegal before...they would have accrued a benefit under the wrong ssn that they now must take away. They can allow her the service so she will be eligible now...but she shouldn't have received a benefit.
As for opening the IRA. If she does have her ssn...ask the company to reissue a revised W-2 and go ahead and open the IRA. But hurry...you only have until April 15 to fund it.
2007-04-03 05:15:06 · answer #2 · answered by digdowndeepnseattle 6 · 0⤊ 0⤋
I assume your joint income is under $75,000 for 2006. In this case, whether or not you or your spouse were covered by a retirement plan at work, both you and your spouse can contribute to traditional IRAs and take a deduction for the contribution ( up to $4,000 for under age 50, $5,000 for age 50 and over).
If your spouse did not make $4,000 ($5,000 if age 50 or older) in 2006, she can still open and contribute up to $4,000 (or $5,000) to an IRA as a spousal IRA. This assumes that together you had earned income at least equal to the IRA contributions.
You could choose Roth IRAs instead, or any combination of traditional and Roth IRAs, as long as the total contributions were under $4,000 (or $5,000) per taxpayer.
2007-04-03 03:31:37 · answer #3 · answered by ninasgramma 7 · 0⤊ 0⤋
Whether she participates in the retirement plan or not, she was still covered by one. Since she was covered by one the deductibility of any IRA contributions may be limited by your AGI.
I won't go into the aspects of working with a "dummy" SSN. (There's no such thing. No SSN = No legal entitlement to work.)
2007-04-02 21:31:39 · answer #4 · answered by Bostonian In MO 7 · 2⤊ 2⤋