Can I contribute to Roth IRA from my wages if my S-corp has a net loss

[Anonymous]

I pay myself a decent wage but this year I expect my business (S-Corp) have a significant net operating loss. So the nwt between my wages and business NOL will still be negative. Can I still contribute to my Roth IRA from my paycheck?

[ColeenD3]

If you have sufficient earned income between your W-2 wages and the loss on your K-1, you can contribute. You are limited by the amount of your positive income.

[Anonymous]

That’s not clear. I have 30K in wages and 40K in NOL leaving me with a net of 10K in losses. Can I contribute 6K from my 30K wages?

[ThomasM125]

Yes, you can make the ROTH IRA contribution based on the wage income of $30,000. Your business loss does not affect that.

[dmertz · Accepted solution]

Only the wages shown in box 1 of your W-2 go toward determining if you have compensation to support a Roth IRA contribution.  If your Schedule K-1 (Form 1120-S) from the S-corp passes through a loss that reduces your AGI, that loss will help to keep you under the threshold above which you are not permitted to make a Roth IRA contribution.