Can I Contribute to an IRA if I’m Married Filing Separately?

If you’re married, you can file a joint tax return with your spouse or file separate returns. If your incomes are similar and you’re worried about moving into a higher tax bracket, it can make sense to file separately. It might also be a good idea if one of you normally claims a significant amount of miscellaneous deductions.

Filing a separate return can save you money at tax time, but it could affect your ability to save for retirement in an individual retirement account (IRA). If you’re married and file separately, here’s what you need to know about making IRA contributions.

Saving in a Roth Could Be Difficult

Roth IRAs can be a great way to save for the future while enjoying some tax advantages. With a Roth IRA, your qualified withdrawals are tax-free. That’s an advantage if you expect to be in a higher tax bracket during retirement.

The annual contribution limit for a Roth IRA is $6,500 for 2023. For those ages 50 and older, a catch-up contribution of $1,000 is allowed. This annual contribution limit is higher in 2024, with the Roth IRA contribution limit being $7,000. The catch-up contribution of $1,000 is also allowed in 2024.

Your tax-filing status, living arrangement, and income can impact your eligibility and the amount that can be contributed to a Roth IRA. The Internal Revenue Service (IRS) uses your modified adjusted gross income (MAGI), which includes deductions and any tax penalties.

The table below shows the various income and contribution limits for a Roth IRA, based on tax-filing status.

As the table shows, if you’re married filing separately, the income limits are significantly different, depending on whether or not you lived together at any time during the year.

• If you didn’t live together at all, you can contribute the full Roth IRA amount as long as your income is less than $146,000 for the 2024 tax year. This could, for example, work for divorcing couples who are still legally married.
• However, if you lived together at any time during the year, the income limit is less than $10,000, meaning that you can’t contribute anything if you made $10,000 or more.
  

A Traditional IRA Could Be Better

A traditional IRA doesn’t offer tax-free withdrawals in retirement, but you have the advantage of deducting your annual contributions if you fit the requirements. (There are income limitations if you or your spouse have a retirement plan—such as a 401(k) or a 403(b)—at work.) Contributing to a traditional IRA can lower your tax liability since deductions reduce your taxable income for the year.

The annual contribution limit of $6,500 in 2023 and $7,000 in 2024 also applies to traditional IRAs. A $1,000 catch-up contribution is allowed each year for those ages 50 and older.

If you and your spouse file as married filing separately, however, the income limits for taking the deduction are severely limited, as the table below demonstrates. Spouses who live together can snag a partial deduction for any spouse whose MAGI is less than $10,000. However, no deduction is allowed for those whose income is above that amount. However, “If you file separately and did not live with your spouse at any time during the year, your IRA deduction is determined under the ‘single’ filing status,” the IRS says.

The good news is that—unlike with a Roth IRA—there is no income limitation for opening a traditional IRA when you’re married filing separately if you don’t take a tax deduction. Once in the IRA, your money will grow tax-free until you withdraw it at retirement, so you still get a tax break.

Now, let’s look at specific requirements for getting a tax deduction for contributing to a traditional IRA.

Covered by a Retirement Plan at Work? It Makes a Difference

The “retirement plan at work” provisions come in three categories for married people:

1. Those with a retirement plan at work
2. Those where just one spouse has a work retirement plan
3. Those where neither spouse has a retirement plan at work

Have a Retirement Plan at Work

As shown in the table below, the amount that people who are covered by a retirement plan at work can deduct in traditional IRA contributions hinges on whether they filed their taxes as single, married filing jointly, or married filing separately, and on their income level.

Spouse Has a Retirement Plan at Work

If you are not covered by a retirement plan at work but your spouse is, then the income limits for taking a deduction are more generous for every taxpayer group except those who are married filing separately.

If you file separate returns, live together, and your spouse is covered by a retirement plan at their job, you’re still only eligible for a partial deduction and only for the spouse(s) whose MAGI is less than $10,000. If your income is more than $10,000, you can’t take any deduction at all.

Not Covered by a Work Plan

If a couple files separately and neither is covered by a retirement plan at work, they can take the full deduction, up to the annual contribution limit, regardless of how much they make. That’s the silver lining of having no 401(k) or other work retirement plan for spouses who live together but file separately.

The Bottom Line

The fact that you’re married filing separately may affect whether you can deduct traditional IRA contributions. But it doesn’t bar you from making them. If you’re set on filing separate returns in a particular tax year—and if your income is too high to contribute to a Roth—then you may have to opt for contributing to a traditional IRA instead and taking a partial or even no deduction.

Talking with a tax or financial professional can help you determine whether filing separate returns makes sense and which IRA is the right fit.