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Does anyone know which line item on the tax form corresponds w/ the earned income amount? I'm trying to determine my IRA contribution limit and had low income last year.
I had low w/ both my gross & net income being less than $5,500 last year. I am now trying to determine my max amount for a Roth contribution for 2018. I think my limit would be my net profit from my contracting business. However, I think I could be wrong and it might be taxable income (line 10 on 1040) or possibly something else.
Can anyone confirm or correct me? Thank you.
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June 3, 2019
11:01 AM
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Retirement tax questions
If your only compensation is from self-employment, it's net profit minus the deductible portion of self-employment taxes and any self-employed retirement deduction. In other words, Schedule 1 line 12 minus lines 27 and 28.
June 3, 2019
11:01 AM
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Retirement tax questions
Awesome. I am assuming the other income adjustments do not matter than for the Roth ira contribution. Just the portion for self employment tax and self-employed retirement deduction. Is that right? Thank you for your help.
June 3, 2019
11:01 AM
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Retirement tax questions
Right. Since your AGI is low, you will likely benefit more from the Roth IRA contribution that you are proposing than from a traditional IRA contribution.
June 3, 2019
11:01 AM
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Retirement tax questions
That is exactly what I was looking to do, but wanted to make sure I didn't over contribute. Thank you again for your help.
June 3, 2019
11:02 AM