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Level 2

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Did I do something incorrect on my taxes? I made $3000 in 2016 and I purchased a $3000 roth ira with a gift and expected to pay taxes on it but my return shows zero owed.

Forum|Forum|7 years ago
June 1, 2019
1 reply
10 views

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Best answer by DavidD66

Based on the information you provided, you should not owe any tax. Gifts are not taxable to the recipient, and your $3,000 of earned income is well below the threshold of having to pay tax. Even though you don't owe any tax, you should file a return because you made contribution to your Roth IRA. You have to have earned income of at least the amount you contribute to be eligible to contribute to an IRA.

Level 15

Based on the information you provided, you should not owe any tax. Gifts are not taxable to the recipient, and your $3,000 of earned income is well below the threshold of having to pay tax. Even though you don't owe any tax, you should file a return because you made contribution to your Roth IRA. You have to have earned income of at least the amount you contribute to be eligible to contribute to an IRA.

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hookedon97Author

Level 2

Thank you - That was very helpful. How does turbo tax report my Roth IRA contribution to the IRS, my 1040 EZ does not show the contribution but I did see the Roth IRA on the review sheet prior to sending my return.