Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.
Q: Can you contribute to an IRA even though you and your wife are both semi-retired?
A: Here are some rules to keep in mind:
* You can make a contribution to an IRA if you have received taxable compensation during the year and will have not reached age 70 1/2 by the end of the year. Compensation includes the amount shown in Box 1 of the Form W-2, or, if you were self-employed, your net earnings from your trade or business.
* The most that you can contribute for any year to your IRA is compensation that you must include in your income for the year or $2,000, whichever is the smaller amount.
* You cannot make contributions to your IRA for the year in which you reach age 70 1/2 , or in any year thereafter.
* For any year after you have reached age 70, and you have compensation, you can continue to make contributions of up to $2,000 per year to a spousal IRA, provided the spouse will not have reached age 70 1/2 by the year's end.
The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.
Members of the Maryland Association of Certified Public Accountants will answer tax questions from readers until April 15 and also offer a Tax Tip of the Week.
To submit a question, call Sundial, The Sun's telephone information service, at (410) 783-1800. In Anne Arundel County call 268-7736, in Harford County 836-5028, and in Carroll 848-0338. Using a touch-tone phone, enter 6225 after the greeting. Push 1 to submit a tax question; state the question in full. Push 2 to hear the tax tip.
Selected questions will be answered in the Business section. No questions will be answered by phone. Please leave your name and phone number.