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Can 2017 income be used for a 2018 Roth IRA Contribution?
Last year, from June of 2017 to December of 2017, I earned 14,000 dollars. I maxed out my 2017 Roth IRA contribution at 5,500 dollars. Can I contribute to my 2018 Roth IRA with income from last year? Or do I have to wait until I have made 5,500 dollars in this year (Jan 1-Dec 31).
Thank you!
June 5, 2019
3:19 PM
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Retirement tax questions
Sorry each year is separate. You don't have to wait to make the income before you contribute but you need to make enough income by the end of the year or you will have an excess contribution.
June 5, 2019
3:19 PM
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Retirement tax questions
So if I am positive I will make more than 5,500 dollars by the end of this year, I could contribute 5,500 now for 2018 to take advantage of compound interest and not worry about excess contributions so long as I report the eventual income (2018) come tax returns next April?
June 5, 2019
3:19 PM
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Retirement tax questions
Correct. However, if you end up not earning the amount necessary to support the Roth IRA contribution that you make, you'll have an excess contribution to resolve before the due date of your 2018 tax return.
June 5, 2019
3:19 PM