How much I can contribute to Roth IRA with 1099 earned income with $5000 gross but $3000 net?

gyum · ‎May 31, 2019

dmertz · ‎May 31, 2019

With eligible compensation only from self employment, the amount that you can contribute to an IRA is your net profit from self-employment (Schedule C line 31) minus the deductible portion of your self-employment taxes. With exactly $3,000 of net profit, your maximum permissible Roth IRA contribution would be $2,788.

Keep in mind, though that if your modified AGI exceeds certain limits, the amount that you may contribute to a Roth IRA may be limited. See, How Much Can Be Contributed?:

https://www.irs.gov/publications/p590a/ch02.html#en_US_2015_publink1000230988

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Marketstar · ‎May 31, 2019

For an IRA contribution, you can contribute up to your net income.

You may be able to increase your refund (or decrease taxes owed) by purchasing a Traditional IRA, and you have until April 18, 2016 to do so.

Although the Roth IRA is not tax deductible as is the Traditional IRA, both may qualify you for the Saver's Credit, which may also increase your refund.

If you are using TurboTax Desktop or TurboTax Online Home & Business

Click on Federal Taxes (Personal if using Home & Business)
Click on Deductions & Credits
Select I'll choose what I work on
Scroll down to Retirement and Investments
Click on Start/Update next to Traditional and Roth IRA Contributions

How much I can contribute to Roth IRA with 1099 earned income with $5000 gross but $3000 net?

Retirement tax questions

Retirement tax questions