Earned Income and Roth IRA

barbarapash · ‎February 8, 2023

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 · ‎February 8, 2023

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 · ‎February 8, 2023

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.