@Cowboy0724 wrote:
Thanks! I read ...total compensation includible in the gross income... to mean all gross income on line 9 or Form 1040 not just W2 compensation. I have pension income, dividend income and taxable railroad retirement income in the line 9 figure. I guess that cannot be included since it is not "earned" income.
The maximum IRA contributions for 2020 is $6,000, or $7,000 if you’re age 50 or older by the end of the year; or your taxable compensation for the year which ever is less.
(Taxable compensation is generally wages that you worked for - W-2 box 1 minus box 11 or net self-employed income minus the deductible part of the SE tax (1040 Schedule 1 line 3 minus the total of lines 14 & 15) but can include commissions, certain alimony and separate maintenance, and nontaxable combat pay ).
See IRS Pub 590A "What is compensation" for details:
https://www.irs.gov/publications/p590a#en_US_2020_publink1000230355
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
