Will I still have to pay taxes this year if I put 1099 MISC income into an IRA?
I will be receiving a 1099 MISC this year for $8000. I plan on puttin gthis money into an IRA or Vanguard account before the end of the year. Will I still be required to pay self employment tax on this income if it is placed in a "tax later" retirement account?
Yes. Although a deductible IRA contribution might reduce the amount of income subject to income tax, it does not reduce the amount subject to self employment tax, at all.
The maximum IRA contribution is $5500 ($6500 if age 50+).
