July 26, 2013 11:16 am

Spousal IRAs Retitled

A working spouse can contribute to an IRA on behalf of a nonworking spouse to grow the retirement savings of the couple. The contributions cannot exceed the earned income of the working spouse. In honor of a former U.S. senator, the spousal IRA has been renamed the Kay Bailey Hutchison Spousal IRA. The change in name does not change the rules for spousal IRAs in any way.

As a reminder: For 2013, the maximum IRA contribution per spouse is $5,500, or $6,500 if you’re 50 or older by the end of this year.

Source: H.R. 2289

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Tax Glossary

Modified adjusted gross income (MAGI)

This is generally adjusted gross income increased by certain items such as tax-free foreign earned income. MAGI usually is used to determine phaseouts of certain deductions and credits.

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