Can I contribute $14K ($7K to my IRA and another $7K for my wife's IRA) with this scenario? if not, what is the maximum we can contribute?
This is combined for both of us:
$34,000 gross earnings
-$24,000 401K contribution
-$3,000 Social Security and Medicare tax ( I did not withhold Fed and state tax, will pay that using est tax form)
$7,000 net pay
My goal is to maximize the contribution our retirement accounts.
The combined IRA contributions are limited to the amount in box 1 of the W-2. That appears to be $10,000, so there would be $4,000 of excess contribution if $7,000 was contributed to each spouse's IRA. However, if the 401(k) contribution was to a designated Roth account in the 401(k), that contribution would not reduce the box-1 amount, making $34,000 available to support IRA contributions.
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