1099-misc and IRA contribution

Forum|Forum|7 years ago
June 3, 2019
2 replies
17 views

If I earn only 1099-misc income, according to IRS regulation, I can still contribute to IRA. However, Turbotax does not allow me to do that. It keeps coming back to me saying my earned income is zero therefore I am not eligible to contribute to IRA. The accountant and financial advisors I consulted with all told me that 1099-misc income is considered as earned income eligible for IRA deduction. Could you help me to resolve this puzzle?

TurboTax Free Edition Online

ekpoon1516Author

Level 2

Turbotax does enter the 1099-misc income to schedule C correctly. Line 12 of 1040 is also positive, more than $7,000. Still, Turbotax does not allow me to take IRA contribution.

ChristinaS

Level 10

You must have net compensation to contribute to an IRA. If self-employed that means:

Your net income on Schedule C, after expenses
less 1/2 of the self-employment tax

If either your 1099MISC is not on Schedule C or the Schedule C is showing a small amount/ loss after expenses, you do not have compensation to contribute to an IRA

You can see your 1040 here:

My Account
Tools
View Tax Summary
Preview 1040
Is the number on line 12 a positive amount

Click- What Is Compensation?

ekpoon1516Author

Level 2

Turbotax does enter the 1099-misc income to schedule C correctly. Line 12 of 1040 is also positive, more than $7,000. Still, Turbotax does not allow me to take IRA contribution.