I'm a mid-20s mustachian that has just realized that I can't take a tax deduction if I open up an IRA, as I make too much money. While this year I only contributed to a Roth 401k to maximize employer match, even if I fully contributed to my traditional 401k I still would have been unable to deduct a traditional IRA from income taxes, as the tradtional 401k wouldn't have offset enough income. So now I have an extra 10k+ cash sitting in my bank account (if you're wondering about all my other money, no, I don't spend it on hookers and blow, rather it's student loans, for which I pay about $1,500/month) and I've devised a little plan and would like to see if it works...
My parents do not contribute to any IRA accounts and between my mom (still working, no SS yet, age 66) and dad (not working, receives SS, age 70 in a week), they will earn approximately 90k this year. I've looked it up, and for a married filing jointly couple, the traditional IRA tax deduction cutoff comes at $98,000. With this in mind, I was thinking of opening an IRA under my moms name (with her blessing of course), contributing the full $6500 (since she is older than 59.5 she can put in bonus money) and then having them send me my portion of their tax return money since they will be able to deduct this $6500 from their tax burden next year.
As my mom will be retiring in a couple of years, and my parents will hence be in a lower tax bracket, she can just withdraw the funds periodically and give them back to me (and yes, I trust my mom to do this) and I'll pay their portion of the tax burden for them. As well, on the IRA she will list me as the sole beneficiary in case anything unfortunate happens in the time being.
My questions are, is this plan sound? Any legal ramifications? Anything that I am missing? Thanks in advance.