Can I contribute $7K each to traditional IRAs for myself and non-working spouse and deduct $14K with MAGI under $230K for 2024? Will this be on top of standard deduction?

The answer depends on a few key factors! Since you've maxed out your workplace 401(k), the deductibility of your traditional IRA contribution depends on your income level. For someone covered by a workplace retirement plan (like you with your 401(k)), the ability to deduct traditional IRA contributions phases out between $123,000-$143,000 for married filing jointly in 2024. If your MAGI is under $123,000, you can take the full deduction for your own $7K contribution. If it's between $123K-$143K, you get a partial deduction. Above $143K, no deduction. For your non-working spouse, the rules are more generous! Since only you are covered by a workplace plan, your spouse's IRA contribution deductibility has a higher phase-out range: $230,000-$240,000. As long as your joint MAGI is under $230K, your spouse can deduct the full $7K contribution. And yes, these IRA deductions ($7K or $14K depending on your exact MAGI) would be in addition to your standard deduction. They're what's called "above-the-line" deductions that reduce your AGI before you even get to the standard deduction.

I faced this exact same issue last year and was super frustrated until I discovered taxr.ai (https://taxr.ai). It's this AI tool that analyzes all your tax documents and tells you exactly what retirement contribution strategies will work best for your situation. I uploaded my W-2 showing my 401k contributions and it immediately flagged that my IRA deductibility would be limited. It also showed me exactly how much I could contribute to my spouse's IRA and get full deductibility. Saved me from making a mistake that would've resulted in unexpected taxes. The tool even calculated my MAGI for IRA purposes and showed me where I stood relative to the phase-out ranges. If you're trying to maximize retirement contributions while getting the most tax benefits, it's seriously worth checking out.

Wanted to follow up about taxr.ai since I ended up trying it. Honestly, it cleared up a lot of confusion for me! My situation was similar to the original poster - maxed 401k, wondering about IRA deductions with a non-working spouse. The tool confirmed I was in the phase-out range for my own IRA but could fully deduct my spouse's contribution. What I didn't realize was that I could do a backdoor Roth for my portion instead of taking a reduced deduction. That wasn't even on my radar! It saved me hours of research and I'm confident we're maximizing our retirement savings in the most tax-efficient way possible. Just wanted to share since it helped me with this exact issue.

If you're hitting roadblocks with IRA contribution questions, you might need to speak directly with the IRS for your specific situation. I tried calling them for weeks about a similar retirement contribution issue, but could never get through. Then I found Claimyr (https://claimyr.com) - they have this service that gets you connected to an actual IRS agent, usually within 15-30 minutes instead of waiting for hours or days. I was super skeptical but they have a demo video showing how it works: https://youtu.be/_kiP6q8DX5c I used it to confirm exactly how the spousal IRA rules worked with my situation (non-working spouse plus self-employment income). The IRS agent walked me through the exact calculation and confirmed I could take both deductions. Having that direct confirmation from the IRS gave me total peace of mind.

I have to admit I was completely wrong about Claimyr. After dismissing it initially, my frustration with the IRS phone system got the better of me and I decided to try it for a complex IRA question similar to this thread. Got connected to an IRS representative in about 20 minutes when I had previously spent literal days trying to get through on my own. The agent confirmed that with my income level, I could fully deduct both my IRA and my spouse's IRA contributions since my MAGI was under the limit. Also verified the deduction would be in addition to standard deduction. The time saved was absolutely worth it. Sometimes being skeptical makes you miss out on services that actually deliver. Definitely keeping this in my toolkit for future tax questions.

An important detail that hasn't been mentioned yet: the spouse with earned income must make enough to cover BOTH IRA contributions. So if you're contributing $7K to your IRA and $7K to your spouse's IRA, you need at least $14K in earned income. Short-term capital gains DON'T count as earned income for IRA contribution purposes. Only wages, self-employment income, alimony, and combat pay qualify as earned income. Also, don't forget that if you're over 50, the contribution limit is $8K per person for 2024, not $7K.

Has anyone been audited specifically for IRA contribution issues? I'm wondering how closely the IRS checks these limits. I might be right on the edge of the phase-out range but don't want to risk an audit by claiming the full deduction if I'm slightly over.

Don't forget another option - if your MAGI is too high for deductible traditional IRA contributions, consider the backdoor Roth IRA strategy. You contribute to a traditional IRA (non-deductible) then immediately convert it to a Roth IRA. As long as you don't have other traditional IRA assets, this can be a clean way to still get money into a Roth IRA even when you're above the direct contribution income limits. Make sure you file Form 8606 to report the non-deductible contribution.

Great question! Let me break this down clearly for you. Since you've maxed out your 401(k), your ability to deduct your own traditional IRA contribution depends on your exact MAGI. For 2024, if you're married filing jointly and covered by a workplace plan, the deduction phases out between $123,000-$143,000. However, your non-working spouse has much more favorable limits! Since only you participate in a workplace plan, your spouse can fully deduct their $7K IRA contribution as long as your joint MAGI stays under $230,000. Even if your MAGI is above $143K (eliminating your deduction), your spouse can still get the full deduction. One important caveat that others haven't mentioned: you need at least $14K in earned income to make both contributions. Your spouse's $2K in capital gains doesn't count as earned income for contribution purposes - only your wages/salary count toward the $14K requirement. And yes, any IRA deductions you qualify for are "above-the-line" deductions that reduce your AGI before applying the standard deduction. So if you can deduct the full $14K, that would be in addition to your ~$29K standard deduction. Given your situation, I'd recommend calculating your exact MAGI first to see where you stand in the phase-out ranges before making the contributions.