Earned Income and Roth IRA

Forum|Forum|3 years ago
February 8, 2023
2 replies
20 views

I had a small amount of earned income in 2022, approximately $3,000.

Can I put that amount into my Roth IRA?

Do I need to put it into my Roth IRA in the year it was earned (2022), or is it okay to add it now in the year 2023?

DaveF1006

Level 15

Yes, you may contribute the entire $3k into your Roth since it is less than $6500 ($7500 if 50 or older). You may make a contribution in 2023 for 2022 as long as it is made by April 18.

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Opus 17

Level 15

Make sure you tell the plan before you make the deposit that it is for 2022 instead of 2023.

Also, if you are self-employed, your limit for "compensation" earned from working is 92% of your net income. This is because your earned income is reduced by half your self-employment tax.