@MelO4 IT IS YOUR TOTAL TAXABLE INCOME limited so you can contribute up to total regardless of taxes owed. Self employment taxes do not reduce taxable income. You contribution is limited to total taxable income. TRADITIONAL IRA contributions is a valid tax deduction for self-employed individuals. The deductible IRA amount is dependent on factors like income limits, filing status, and whether you or your spouse already contribute to a retirement plan. Only traditional IRAs are tax-deductible.
2023, the total contributions you make each year to all of your traditional IRAs and Roth IRAs can't be more than:
- $6,500 ($7,500 if you're age 50 or older), or
- If less, your taxable compensation for the year
You may want to look at a SEP instead of a ROTH. Both a SEP IRA and Roth IRA offer tax benefits when you retire. The main difference between a SEP and Roth IRA is that SEP IRAs offer tax-deferred growth on your investments, while Roth IRAs give you tax-free growth and withdrawals in retirement. Contributions to SEP IRAs are tax deductible.
**I don't work for TT. Just trying to help. All the best.
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**Mark the post that answers your question by clicking on "Mark as Best Answer" I am NOT an expert and you should confirm with a tax expert.
