Are you a nonworking spouse? You may still be able to contribute to an IRA
Married couples may not be able to save as much as they need for retirement when one spouse doesn’t work outside the home — perhaps so that spouse can take care of children or elderly parents. In general, an IRA contribution is allowed only if a taxpayer earns compensation. However, there’s an exception involving a “spousal” IRA. It allows contributions to be made for nonworking spouses.
For 2021, the amount that an eligible married couple can contribute to an IRA for a nonworking spouse is $6,000, which is the same limit that applies for the working spouse.
IRA advantages
As you may know, IRAs offer two types of advantages for taxpayers who make contributions to them.
- Contributions of up to $6,000 a year to an IRA may be tax deductible.
- The earnings on funds within the IRA are not taxed until withdrawn. (Alternatively, you may make contributions to a Roth IRA. There’s no deduction for Roth IRA contributions, but, if certain requirements are met, distributions are tax-free.)
As long as the couple together has at least $12,000 of earned income, $6,000 can be contributed to an IRA for each, for a total of $12,000. (The contributions for both spouses can be made to either a regular IRA or a Roth IRA, or split between them, as long as the combined contributions don’t exceed the $12,000 limit.)
Boost contributions if 50 or older
In addition, individuals who are age 50 or older can make “catch-up” contributions to an IRA or Roth IRA in the amount of $1,000. Therefore, for 2021, for a taxpayer and his or her spouse, both of whom will have reached age 50 by the end of the year, the combined limit of the deductible contributions to an IRA for each spouse is $7,000, for a combined deductible limit of $14,000.
There’s one catch, however. If, in 2021, the working spouse is an active participant in either of several types of retirement plans, a deductible contribution of up to $6,000 (or $7,000 for a spouse who will be 50 by the end of the year) can be made to the IRA of the nonparticipant spouse only if the couple’s AGI doesn’t exceed $125,000. This limit is phased out for AGI between $198,000 and $208,000.
Contact us if you’d like more information about IRAs or you’d like to discuss retirement planning.
Are your company’s job descriptions pulling their weight?
At many businesses, job descriptions have it easy. They were “hired” (that is, written) many years ago. They haven’t had to change or do anything, really, besides get copied and pasted into a want ad occasionally. They’re not really good at what they do, but they’re used again and again because everyone assumes they’re just fine.
The problem is, they’re not. Outdated, vague, or inaccurate job descriptions can lead to longer hiring times, bad hires, workplace conflicts, and even legal exposure in employment law actions. So, now the million-dollar question: Are your company’s job descriptions pulling their weight?
Review and revise
There’s only one way to find out: Conduct a thorough review of your job descriptions to determine whether they’re current and comprehensive.
Check to see whether they list outdated procedures or other outmoded elements, such as software you’ve long since phased out. As necessary, carefully revise the wording to describe the duties and responsibilities for a particular position as it exists today.
If you don’t already have formal, written job descriptions for every position, don’t panic. Ask employees in those positions to document their everyday duties and responsibilities. Each worker’s supervisor should then verify and, if necessary, help refine the description.
Put them to work
After you’ve updated or created your job descriptions, you can use them to increase organizational efficiency. Weed out the marginal duties from essential ones. Eliminate superfluous and redundant tasks, focusing each position on activities that generate revenue or eliminate expenses. You may be able to make improvements in other areas, too, such as:
Recruiting. Are you hiring people with the right skills? Up-to-date job descriptions provide a better road map for finding ideal candidates to fill your open positions.
Compensation. A complete and accurate description of a position's hiring requirements, job duties, and responsibilities provide context and rationalization for how that person is compensated.
Workload distribution. Are workloads efficiently distributed among employees? If not, rearrange them. You may find this necessary and beneficial when duties change because of revisions to job descriptions.
Cross-training. Can your employees handle their coworkers’ duties and responsibilities? In emergencies and non-emergencies (vacations, for instance) — and as a fraud-prevention measure — having workers who can cover for each other temporarily is critical.
Performance management. Are employees doing their best? Detailed job descriptions allow supervisors to determine better whether workers are completing their assigned duties, meeting or exceeding expectations, and growing with the company.
Stop the slackers
No business should put up with slacker job descriptions that do nothing but hang around the break room exchanging gossip and eating all the donuts. Ensure yours actively contributes to your company’s success by managing their performance just as you do for real-live humans.
© 2021