Hello, my single-member LLC's net profit in 2017 was $4,920 (Form 1040, line 12). Self employment tax was $695 (Form 1040, line 32). I had no other earned income, and I have just one traditional IRA to which I have not yet made any contribution for 2017. No special situations apply to me (for instance, I am not a reservist). I am over age 50.
What is the maximum I can contribute to my traditional IRA for 2017 given these facts? Thanks very much!
The $695 of SE taxes appears on Form 1040 line 57, not line 32. The deductible portion of SE taxes is then $348 on Form 1040 line 27. The amount that you have available to contribute to a regular traditional IRA is therefore:
$4920 - 348 = $4,572
I think this answer is correct based on another conversation I had today. Thanks so much for your clear, concise and helpful guidance!
See below:
https://ttlc.intuit.com/replies/5402421
When you enter a contribution into TurboTax, the program will let you know if and how much of the contribution is deductible- you can then view the result on the refund meter.
You should make the above determination before you purchase an IRA