How can the allowable Roth IRA contribution be calculated in the following scenario?
The taxpayer is retired and, just for the example, expects to be in the 22% tax bracket.
The taxpayer earns just $3000 as an independent contractor. This is the entire earned income for the year. The taxpayer must pay SEP tax on this income.
The taxpayer wants to contribute the maximum allowable to a Roth IRA as soon as possible (assume it's early in the tax year) but does not wish to make an excess contribution that must later be withdrawn.
How does the taxpayer calculate the maximum amount they can contribute to a Roth IRA?
