Many individuals own IRAs. IRA means one of three things, namely: (1) Individual Retirement Arrangement; (2) Individual Retirement Account; or (3) Individual Retirement Annuity. When most individuals hear IRA, they think of an Individual Retirement Account which is a personal retirement savings account that offers tax benefits and a range of investments. An Individual Retirement Annuity is a tax-advantaged savings vehicle with structured contribution and payouts. Any type of IRA belongs to one individual. As such, that is why the “I” is the first letter of every type of IRA. During the IRA owner’s lifetime, there cannot exist joint IRA ownership. Frequently, married retirement savers ask about establishing a joint IRA with a spouse. Joint IRA ownership is not permitted under IRS rules.
Given the IRS rules that do not permit joint IRA ownership, it can be interpreted that with respect to a married couple, spouses could be kept separate when it comes to their retirement accounts. A thorough review of IRA rules shows that it is not that simple. As the following discussion will demonstrate, one spouse can impact the other spouse’s IRA in several ways.
Impact #1: A Spouse’s IRA Contribution Eligibility
Marriage between two individuals can have an impact on each spouse’s eligibility to contribute to an IRA in two ways. One way is a non-working spouse’s eligibility to make an IRA contribution to any type of IRA (traditional or Roth). The second way is both spouses’ eligibility to make deductible traditional IRA contributions.
In order to contribute to either a traditional IRA or a Roth IRA, an individual has to have earned income (salary, wages or net self-employment) for the year an IRA contribution is made. Special rules exist for married couples with respect to earned income. A spouse with little or no earned income during the year is eligible to make an IRA contribution during a year based on the other spouse’s earned income during that same year. If the spouse with the higher amount of earned income has enough earned income during the year, then both spouses are eligible to make the maximum IRA contribution for that year. The following example illustrates:
Example 1. Jules, age 58, retired from federal service on September 30,2025 and will have no earned income during 2026. Jules’ wife, Rochelle, age 55, is working during 2026. Her 2026 gross salary will be $92,000. Based on Rochelle’s earned income, both Jules and Rochelle can each contribute the maximum $8,600 to their IRAs for the year 2026.
For married individuals filing their taxes as married filing jointly and who are active participants in a private company or government retirement plan, the ability to make a deductible traditional IRA contribution for 2026 “phases out” when their modified adjusted gross income (MAGI) is between $129,000 and $149,000. A married individual’s participation in a retirement plan can result in the individual’s spouse who does not participate in a retirement plan being ineligible to deduct their contribution to a traditional IRA. For 2026, the phase-out range for an individual who is not an active participant in a retirement plan but is married to an active participant in a retirement plan is between $242,000 and $252,000. The following example illustrates:
Example 2. Samantha is a federal employee, aged 55, and covered by FERS and contributes to her TSP. Samantha’s husband Joel, age 58, works for a small company but does not have access to any company retirement plan. Samantha and Joel’s 2026 MAGI is expected to be $265,000. Both Samantha and Joel are each eligible to contribute the maximum to a traditional IRA for 2026 ($8,600). Since their 2026 MAGI exceeds $252,000, neither Samantha’s nor Joel’s traditional IRA contribution is tax deductible. Their 2026 traditional IRA contributions are nondeductible.
With respect to Roth IRAs, contributions to Roth IRAs are never tax deductible. Roth IRA contributions are subject to MAGI limits. For 2026, the phase-out range for married filing jointly occurs when MAGI is between $242,000 and $252,000. For single filers, the phase-out range is $153,000 to $168,000. When two individuals get married, it is possible that both of them may no longer qualify to make Roth IRA contributions. The following example illustrates:
Example 3. Kevin made his 2026 Roth IRA contribution of $7,500 in March 2026 when he was single. His 2026 AGI is expected to be $145,000. In May 2026, Kevin married his girlfriend, Kathy. Kathy’s 2026 AGI is expected to be $150,000. Since their expected joint income ($145,000 plus $150,000 equals $295,000) exceeds the phase-out limit of $252,000, Kevin’s Roth IRA contribution is considered an “excess” contribution. He has to correct the excess Roth IRA contribution no later than October 15,2027 (the extended 2026 federal income tax return filing deadline). If he does not correct the excess Roth IRA contribution, he will be subject to a six percent IRS “excess contribution” penalty for every year his $7,500 Roth IRA contribution remains in his Roth IRA.
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Impact #2: Spousal Impact on IRA Taxation and Penalties
The taxation of an individual’s traditional IRA depends on the IRA’s cost basis. A traditional IRA cost basis depends on the amount of the traditional IRA owner’s after-taxed contributions their traditional IRAs. A “pro-rata” formula (the ratio of the contributions made with after-taxed dollars divided by the total traditional IRA contributions consisting of before-taxed dollars and after-taxed dollars) is used to determine the amount of income tax due when withdrawals are made from the traditional IRA. Only the individual’s traditional IRA accounts are used in the calculation of the pro-rata formula. The individual’s spouse’s traditional IRA accounts are not used in the individual’s pro-rata formula calculation.
With respect to Roth IRAs, the taxation rules are similar. A “five-year clock” for determining the taxable amount of post-age 59.5 Roth IRA accrued earnings is used. The owner spouse’s Roth IRA ownership is not used.
The rules are not as straightforward with respect to the IRS’ 10 percent early (before age 59.5) withdrawal penalty from an IRA. Some exceptions to the 10 percent early withdrawal penalty apply only when the IRS funds are used for the IRA owner. Other exceptions apply when withdrawn IRA funds are used for certain family members. For example, only the IRA owner’s disability qualifies for the disability exception. A non-disabled spouse cannot take funds from the individual’s IRA in order to pay for the disabled spouse’s expenses. On the other hand, a penalty-free distribution may be taken from an individual’s IRA for a spouse’s higher education expenses. A spouse’s medical expenses are also included when determining eligibility for the medical expense exception to the 10 percent penalty.
Impact #3: IRA Required Minimum Distributions
The impact of a spouse is mixed with respect to required minimum distributions (RMDs). When both spouses are traditional IRA owners and become subject to IRA RMDs when they reach their required beginning date (currently, age 73) spouses are treated separately for RMD aggregation purposes. That means a spouse cannot combine their RMD with the other spouse’s spouse.
However, one spouse will have no impact on the other spouse for purposes of the “first-dollars-out rule.” The first dollars distributed from a traditional IRA In a year the RMDs are due are considered the IRA RMD. A provision coming out of the SECURE Act regulations confirms that if an individual owns multiple traditional IRAs (even if they own multiple traditional IRAs held with multiple custodians) their annual RMD traditional IRA RMD must be withdrawn before any Roth IRA conversions can be completed. A spouse’s traditional IRAs have no effect on the other spouse’s traditional IRA RMD calculation . The following example illustrates:
Example #4. Frank, age 75, owns four traditional IRAs. Frank’s wife, Rachel, age 74, owns two traditional IRAs. Frank plans to convert one of his IRAs to a Roth IRA during 2026. Before performing the Roth IRA conversion, Frank will need to take his 2026 traditional IRA RMD. Frank’s 2026 traditional IRA calculation will be calculated based on his combined traditional IRA balances as of December 31, 2025.Rachel is not required to take her 2026 traditional IRA RMD prior to Frank’s Roth IRA conversion.
One variable of a traditional IRA RMD calculation can be affected by a spouse. That variable is the determination of the IRA traditional owner’s life expectancy. The life expectancy factor is obtained from the IRS Uniform Lifetime Expectancy Table (found in IRS Publication 590-B). For those traditional IRA owners who are married to a spouse who is more than 10 years younger and who is the sole beneficiary of their traditional IRA, the life expectancy factor is obtained from the IRS Joint Life and Last Survivor Expectancy Table (also found in IRS Publication 590-B). The benefit of using the IRS Joint Life Expectancy Table is that the RMD will be larger resulting in less taxable income. The following example illustrates:
Example 5. Marvin, aged 78, is married to Shirley, aged 65. Shirley is the sole beneficiary of Marvin’s traditional IRA. She is more than 10 years younger than Marvin. Because of the more than 10-year age difference and Shirley is the sole beneficiary, Marvin’s life expectancy factor is obtained from the IRS Joint Life and Last Survivor Expectancy Table and is equal 24.1 to 24.1 years. In contrast, the IRS Uniform Lifetime Expectancy Table life expectancy for age 78 is 22.0 years. This means that given Marvin’s traditional IRA balance as of 12/31/2026, Marvin’s 2026 RMD will be:
(24.1 years less 22.0 years)/22.0 = 9.55% less.
Impact #4: Qualified Charitable Contributions
Any individual aged 70.5 and older who owns an IRA is permitted to make a Qualified Charitable Contribution (QCD). Spouses are considered separate when it comes to making QCDs. Therefore, when both spouses are IRA owners and each spouse reaches 70.5, each spouse can potentially make a maximum QCD each year. For example, during 2026, the maximum QCD is $111,000.
A downside to the QCD annual limit being applied on a per spouse basis is that when a spouse in any year, the amount that the two spouses can donate for that year could be cut in half. The following example illustrates:
Example 6. Arnold and Barbara are married and both are aged 78. They both own IRAs and each year they attempt to make the maximum QCDs from their IRAs. They usually make their QCDs late in the year. In 2025, Arnold died before he made his QCD. Barbara inherited Arnold’s IRA. For the year 2025, Barbara could make only her QCD of $108,000 (maximum possible during 2025). As the beneficiary of Arnold’s IRA, Barbara can make a QCD from her IRA or from the IRA funds she inherited from Arnold. She cannot make the full QCD amount ($108,000) from both of their accounts.
Edward A. Zurndorfer is a CERTIFIED FINANCIAL PLANNER™ professional, Chartered Life Underwriter, Chartered Financial Consultant, Chartered Federal Employee Benefits Consultant, Certified Employees Benefits Specialist and IRS Enrolled Agent in Silver Spring, MD. Tax planning, Federal employee benefits, retirement and insurance consulting services offered through EZ Accounting and Financial Services, and EZ Federal Benefits Seminars, located at 833 Bromley Street - Suite A, Silver Spring, MD 20902-3019 and telephone number 301-681-1652. Raymond James is not affiliated with and does not endorse the opinions or services of Edward A. Zurndorfer or EZ Accounting and Financial Services. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.
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Ed Zurndorfer, EA, ATA, CFP®, CLU®, ChFC®, CEBS®, ChFEBC℠: Federal Employee Benefits Expert
A former career Federal employee, Ed has published a staggering 1,200+ separate articles on Federal Benefits and Retirement!
Just “Google” his name, and you are likely to find a plethora of sites that contain his writings. Drawn to its mission to reach, teach
and serve Feds, Serving Those Who Serve is the only financial planning practice with which Ed has chosen to affiliate in over
20 years teaching. In addition to conducting Federal Benefits seminars for Serving Those Who Serve, you can find Ed’s
writings here on our blog in the FedZone, and on Fed-Soup, MyFederalRetirement, FederalNews Radio and NITP.
He is a member of the Maryland Society of Accountants, the National Association of Enrolled Agents, the International Society of Certified Employee Benefits Specialists, the Financial Planning Association, the National Association of Health Underwriters,
and the Society of Financial Service Professionals. Since 1999, Ed has taught many thousands of Federal employees about
their benefits, in person and at Federal agencies all over the country. Ed is a true national treasure.
Edward A. Zurndorfer is a CERTIFIED FINANCIAL PLANNER™ professional, Chartered Life Underwriter, Chartered Financial Consultant, Chartered Federal Employee Benefits Consultant, Certified Employees Benefits Specialist and IRS Enrolled Agent in Silver Spring, MD. Tax planning, Federal employee benefits, retirement and insurance consulting services offered through EZ Accounting and Financial Services, and EZ Federal Benefits Seminars, located at 833 Bromley Street - Suite A, Silver Spring, MD 20902-3019 and telephone number 301-681-1652. Raymond James is not affiliated with and does not endorse the opinions or services of Edward A. Zurndorfer or EZ Accounting and Financial Services. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.