The general rule for making IRA contributions after an individual dies is that you can't.For instance, let's say that Michael, age 55, earned $50,000 before he died in 2021. If he has not already made an IRA contribution for the year, his spouse, or the representative of his estate, cannot make a contribution for him after his death. IRS has a very logical explanation for this rule - there is no need for a deceased person to save for their retirement. It is hard to argue with that logic.However, as is the case with many of the IRA rules, there is an exception. Let's say that Michael is married to Kelly. Kelly lost her job during the recession and has not been able to find another job. Michael has been making spousal IRA contributions to Kelly's IRA for the last couple of years. We know that there can be no contribution to Michael's IRA now, but can a spousal contribution still be made to Kelly's IRA?Generally speaking, the answer is yes. As long as Kelly files her tax return as married filing jointly, she will be able to make an IRA contribution to her IRA based on Michael's earned income. There is still a need for Kelly to save for her retirement.------------------------------
Ronald Stair, PHD, MLT, EA, ERPA
CREATIVE PLAN DESIGNS, LTD.
East Meadow NY
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Original Message:
Sent: 05-21-2022 04:54 AM
From: Jason Palmer
Subject: SEP Contribution
The IRS holds that given the death, there is no longer a reason/benefit/need to be saving for retirement.
I had same issue when researching making ROTH IRA contribution for 2021 after a death in early 2022 before April 15th.
Jason Palmer
Palmer Computer Services Inc
Cell 917-886-3312
www.jasonpalmer.com
jason@palmer.net
Sent from my iPhone
Original Message:
Sent: 5/20/2022 7:58:00 AM
From: Gerald Cohen
Subject: SEP Contribution
If a client passes away and his return is on extension, before the contribution was made for the extended year, is it still allowed. The bank says they can't accept it. Any technical reference, since I believe it's still allowable?
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Gerald S. Cohen, CPA
cell 516 455-0643