Last Updated 12/07/2022
QUESTION 1: I am not sure what my compensation income will be yet for 2022. My question is if I don’t have any compensation, but my wife does, outside my business. Can I still put in up to $6,500 into my solo 401k Roth account.
ANSWER: In order to make solo 401k contributions, you must generate earned income from your self-employment activity.
QUESTION 2: Same as above, but our combined adjusted gross income is zero, due to a Net Operating loss. But wife still has W-2 income.
ANSWER: Your wife can open a Roth IRA and make an annual contribution based on her W-2 income. For example, for the 2022 tax year she can make a $6,500 contribution plus an additional catch up amount of $1,000 if she is age 50 or older.
She can make the full Roth IRA contribution as long as she meets the following:
Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is not greater than $204,000. You cannot make a Roth IRA contribution if your modified AGI is over $204,000. For the 2023 limits, VISIT HERE.
What’s more, you can also make a spousal Roth IRA contribution once you open a Roth IRA based on your spouse’s W-2 income.
Can you contribute to a Roth IRA for your spouse? You can contribute to a Roth IRA for your spouse provided the contributions satisfy the spousal limit discussed in IRS Publication 590-A under chapter 1 How Much Can Be Contributed, you file jointly, and your modified AGI is$204,000 or less.
Thanks,
Adam in Oregon
