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My income is social security and dividends. The ObamaCare subsidy needs to be repaid (salary $4000 too much). Can I make an IRA contribution to reduce income.
I am retired and have social security and dividernds for income (no W2 or taxable wages). I withdrew more than I should have from my IRA last year and the health care subsidy on my tax return needs to be repaid. I want to know if I can make a contribution before April taxes (in 2018) to reduce my income.
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June 6, 2019
8:25 AM
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Retirement tax questions
No, you can only make an IRA contribution if you have "earned income" from wages or self-employment.
June 6, 2019
8:25 AM
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Retirement tax questions
Further, Obamacare penalties are based on Modified AGI, so contribution (even if legal) won't help ...
June 6, 2019
8:25 AM
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Retirement tax questions
We got snagged on Obamacare premium paybacks the same way ... I took a distribution from my IRA such that I would have little or no tax to pay but, the premium subsidy was then voided and the premium payback amount is added to my taxable income. Now, we've got a big tax bill and - just to rub salt into the wound - a tax penalty for not withholding enough from the IRA distribution. The whole thing is pretty insidious.
June 6, 2019
8:25 AM