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Can I contribute to a Roth IRA
Hi all! If you can please help provide some insight to my questions below? I would greatly appreciate it!
1) I know that in order to contribute to a Roth IRA, I need to have earned income. So does that mean that the IRS actually checks if you've earned any income for the year ? Like if they don't receive some type of W4 from a company then they will penalize you for contributing to the Roth IRA? What if I work for my school? I work as a professor's assistant (teacher's assistant, i.e TA) and have some earned income. Does that count? Does my school send W4's to the IRS? Otherwise, how will the IRS know that I have earned income from my school?
2) I am going to be a TA for the spring semester (the first part of 2022) but I will no longer be a TA for the fall semester (the latter part of 2022). Am I still eligible to contribute to a Roth IRA during the first part of 2022 (when I'm still employed)? Am I still eligible to contribute to a Roth IRA during the latter part of 2022 (when I'm no longer employed)? Does the IRS specify that a person needs to have earned income CONSISTENTLY throughout the whole year in order to contribute? Just asking because if this is the case, then I won't quality.
However, if it's only the case where I can contribute if I am employed, then I will go ahead and make my 2022 Roth IRA contribution in the early part of 2022 (when I'm employed) and then won't make any more contributions towards the end of the year (when I'm no longer employed)
If I do the above, will there be any penalties? Are there going to be penalties if I contribute when I'm employed, and then do not contribute when I'm no longer employed for that year?
Alternatively, let's say that I'm employed in the first part of 2022 but then I'm no longer employed in the latter part of 2022.... does that mean that if I contribute to my Roth IRA during the latter part (when I'm not employed), then I will be assessed a tax penalty even though I DID work in the beginning of the year? Is there any specification on the duration of my employment that enables me to contribute to the Roth IRA account?
I really appreciate your help!