When AGI in phase-out range, the Worksheet creates a percentage of earned income that can be contributed. Don’t IRS rules impose a percentage of the contribution limit (up to earned income amount) that can be contributed when in the phase-out AGI range, not a percentage of earned income?
The relevant line of the Worksheet is 13, which specifies a percentage of the lesser of line 7 (earned income) or line 8 (maximum contribution amount) as shown on line 11 according to the percent in line 4, to determine the maximum contribution amount. If earned income is less than maximum contribution amount the Worksheet determines the phase-out contribution amount based on a percent of earned income.
Is this correct, that IRS rules limit a Roth contribution to a percentage of earned income when in the phase-out range, even if it is less than a percent of the contribution amount or phased-out contribution amount, as determined using the IRS worksheet and several online phase-out contribution calculators?
