Can I contribute all money I earned ($2,500) from 1099-Misc as self employment to Roth IRA? My AGI is $85,000. Thanks.

[mjc4maureen]

Can I contribute all money I earned ($2,500) from 1099-Misc as self employment to Roth IRA?  My AGI is $85,000.  Thanks.

[KittyM · Accepted solution]

Yes. Roth IRA's are funded with "after-tax" dollars and you can generally contribute as long as you have enough earned income and don't go over the contribution limits of $5,500/$6,500 over 50, or the income limits.  Your Roth IRA phases out at $120,000–$135,000 Single, $189,000–$199,000 Married filing jointly, $0–$10,000 Married, filing separately.

You can contribute to a traditional or Roth IRA whether or not you participate in another retirement plan through your employer or business. 

[dmertz]

Although you can make a Roth IRA contribution based on your self-employment income, if you have no other earned income the amount that you are permitted to contributed to the Roth IRA is slightly less than your $2,500 of net profit.  The maximum amount that you can contribute to the Roth IRA is $2,500 minus the deductible portion of self-employment taxes.  This means that a maximum of $2,323 can be contributed.

[mjc4maureen]

Very good insight.  Thank you very much.