IRAs

Dear Liz: I’m 64 and retired on a Social Security income of $10,000. My wife is also 64 and is still working, earning $91,000 a year. She contributes $13,000 to a 401(k). Can both of us also contribute the maximum $6,000 to our IRAs?

Answer: Since your wife has earned income, you both can contribute to IRAs, and you would be able to deduct your contribution. She, however, probably would be able to deduct only part of hers.

Because she’s covered by a retirement plan at work, her ability to deduct an IRA contribution for 2011 phases out at a modified adjusted gross income of between $90,000 and $110,000, said Mark Luscombe, principal analyst for tax research firm CCH, a Wolters Kluwer business. The portion of your Social Security benefits that are taxable would be added to her earned income to determine how much of her contribution is deductible.

“The working spouse would appear, therefore, based on the facts available, to only qualify for a partial deduction of her IRA contribution,” Luscombe said.

You’re luckier. As a non-working spouse, the phase-out range for deducting an IRA contribution is higher: In 2011, it applied to modified adjusted gross income between $169,000 and $179,000. “The non-working spouse would therefore, under these facts, qualify for a full deduction for a $6,000 contribution to an IRA,” Luscombe said.