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Yes, you can make a regular (non-rollover) contribution to a traditional IRA or a Roth IRA if you or your spouse have qualifying income, typically earned income from employment. TurboTax will advise you on the deductibility depending on your age, AGI and other requirements.
Qualifying income also includes the types of income that are subject to self-employment tax. (It includes these types of income even if you don’t pay self-employment tax because of your religious beliefs.) You may earn self-employment income in various ways:
When figuring how much qualifying income you have to support your IRA contribution, it’s your net earnings from self-employment that count. Subtract your expenses and other deductions connected with the activity that produced the income. Also, reduce your self-employment income by the amount you contribute to a retirement plan connected with your self-employment (such as a Keogh plan), and by the deduction for one-half of the self-employment tax.
Loss from self-employmentIf you have a loss from self-employment, do not subtract the loss from any earnings you have as an employee when determining how much qualifying income you have. For example, if you work part of the year as an employee making $6,000, then spend the rest of the year being self-employed with a loss of $5,400, your qualifying income is still $6,000.
Yes, you can make a regular (non-rollover) contribution to a traditional IRA or a Roth IRA if you or your spouse have qualifying income, typically earned income from employment. TurboTax will advise you on the deductibility depending on your age, AGI and other requirements.
Qualifying income also includes the types of income that are subject to self-employment tax. (It includes these types of income even if you don’t pay self-employment tax because of your religious beliefs.) You may earn self-employment income in various ways:
When figuring how much qualifying income you have to support your IRA contribution, it’s your net earnings from self-employment that count. Subtract your expenses and other deductions connected with the activity that produced the income. Also, reduce your self-employment income by the amount you contribute to a retirement plan connected with your self-employment (such as a Keogh plan), and by the deduction for one-half of the self-employment tax.
Loss from self-employmentIf you have a loss from self-employment, do not subtract the loss from any earnings you have as an employee when determining how much qualifying income you have. For example, if you work part of the year as an employee making $6,000, then spend the rest of the year being self-employed with a loss of $5,400, your qualifying income is still $6,000.
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