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IRA contributions after the break-up

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in Small Business Tax,Small Business Tax Deduction Strategies

Q. I’m getting divorced and won’t likely have any salary of my own this year. Can I still contribute to an IRA for 2013? Anonymous

A. It depends. Assuming you’ll be filing a 2013 tax return as an unmarried individual, you can no longer benefit from a “spousal IRA” where only one spouse works.

Without any earned income of your own, you can’t contribute to an IRA for the 2013 tax year. How­ever, if you’re entitled to alimony as part of the divorce decree, alimony received in 2013 counts as “earned income” for this purpose.

Tip: The maximum IRA contribution allowed for 2013 is $5,500 (up from $5,000 in 2013). You can add an extra $1,000 if you’ll be age 50 or older at year-end.

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